What’s Holding US Crude Oil below $60?



US crude oil

On December 11, 2017, US crude oil (USO) (USL) January 2018 futures rose 1.1%. The 2% rise in Brent crude oil prices could have supported the gain in US crude oil prices. In Part 5, we’ll discuss why Brent crude oil outperformed US crude oil. The pipeline outage in the North Sea could have helped WTI oil prices rise.

Rising US crude oil production is the main factor that could hold US crude oil below the $60 level. We’ll discuss it in Part 2. In Part 3, we’ll discuss the crucial relationship between oil prices and oil inventories.

On December 4–11, 2017, US crude oil January futures rose 0.9%. The S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 0.8% and 0.4% during this period. Gains in oil prices could benefit these equity indexes.

Moving averages

On December 11, 2017, US crude oil active futures were 1.7%, 6.6%, 12.5%, and 16.1% above their 20, 50, 100, and 200-day moving averages, respectively. US crude oil prices have held near the 20-day moving average or the $57 level in the last two trading sessions. Crude oil’s 50-day moving average was 8.9% above its 200-day moving average—a sign that could support oil prices.

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