US crude oil futures
WTI (West Texas Intermediate) crude oil futures are just below the key resistance level of $50 per barrel as of August 1, 2017. The $50 per barrel level is an important psychological level for crude oil. Traders need more bullish information to build on the bullish momentum.
Meanwhile, the United States Oil Fund (USO) tracks the daily price movements of WTI. Bloomberg surveys estimate that investors withdrew $845.7 million from the USO ETF in July 2017. It was the largest monthly withdrawal since March 2009, which suggests traders are turning bearish on crude oil (XLE) (XOP). Lower crude oil prices have a negative impact on oil producers like Chesapeake Energy (CHK), Continental Resources (CLR), Stone Energy (SGY), and Denbury Resources (DNR).
Crude oil price forecasts
Credit Suisse forecasts that WTI and Brent crude oil prices will average $57.50 per barrel and $60 per barrel in 2020, which is $5 per barrel less than the previous forecasts for WTI and Brent. Credit Suisse expects the crude oil market won’t rebalance until 3Q18.
Credit Suisse expects that global crude oil inventories will be 120 MMbbls (million barrels) above their five-year average by the expiration of the production cut deal in March 2018.
The EIA (U.S. Energy Information Administration) estimates that US crude oil prices will average $48.9 per barrel in 2017 and $49.5 per barrel in 2018. The EIA also estimates that Brent crude oil prices will average $50.79 per barrel in 2017 and $51.6 per barrel in 2018. WTI and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel, respectively, in 2016.
Also see US Natural Gas Market: Fundamental Insights for Investors for more on natural gas.