Could US Crude Oil Fall below the $50 Mark?

US crude oil

On October 3, 2017, US crude oil (USO) (OIIL) November futures fell 0.3% and closed at $50.42 per barrel. Between September 26 and October 3, 2017, US crude oil (USL) November futures fell 2.8%.

During this period, the Dow Jones Industrial Average Index (DIA) rose 1.6% and outperformed the S&P 500 Index (SPY) by ten basis points. Oil prices are important for these equity indexes.

Could US Crude Oil Fall below the $50 Mark?

Could US crude oil fall below the $50 mark?

US crude oil production could have limited upside in the short term, which we’ll analyze in the next part of this series. However, US crude oil stockpiles could fall again because the US refinery utilization rate is rising after being impacted by Hurricane Harvey. We’ll discuss this topic in Part 3 of this series. These bullish factors could support US crude oil close to the $50 mark.

Moving averages

On October 3, 2017, US crude oil active futures closed 0.8%, 1.7%, 5.6%, and 3.1% above their 20-day, 50-day, 100-day, and 200-day moving averages, respectively. The 20-day moving average could be an immediate support for US crude oil prices.

The 50-day moving average stood just 1.3% below the 200-day moving average. The contraction in the two moving averages’ difference could also help support oil prices.