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Crude Oil Futures: Next Important Resistance Level

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Energy calendar 

On January 9, 2018, the API (American Petroleum Institute) will release its crude oil inventory report. The EIA will release its crude oil inventory report on January 10, 2018. Baker Hughes will release its US crude oil rig count report on January 12, 2018.

All of these events could impact crude oil (USO) prices. US oil (DBO) prices rose 1.7% last week due to several bullish drivers, which we discussed in Part 1 of this series. Higher oil (UCO) prices favor energy producers (PXI) (XES) like Baytex Energy (BTE), Contango Oil & Gas (MCF), and Goodrich Petroleum (GDP).

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Bullish drivers for WTI crude oil futures  

WTI crude oil (UCO) futures closed at $62.01 per barrel on January 4, 2018—the highest level since December 2014. WTI prices rose ~12.4% in 2017 and 45% in 2016. Brent oil prices rose 17% in 2017 and 52% in 2016.

Crude oil prices are at a multiyear high due to bullish factors like the supply outage in Britain, Nigeria, Libya, Venezuela, and Iraq. The fall in global and US oil inventories also helped oil (BNO) prices. The extension of ongoing production cuts and strong demand had been oil prices’ major drivers.

Bearish drivers for US crude oil futures  

WTI crude oil (USL) futures tested $26.21 per barrel on February 11, 2017—the lowest level in almost 14 years. Any rise in US crude oil production could cap the upside for oil (UWT) prices.

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Crude oil price volatility 

The CBOE Crude Oil Volatility Index (OVX) fell 1.8% to 21.9 on January 8, 2018—near a three-year low. It suggests less volatility in oil (DWT) prices.

US crude oil price resistance 

US crude oil prices were above their 20-day, 50-day, and 100-day moving averages on January 8, 2018. It suggests more bullish momentum for oil prices. Prices could even breach key resistances of $63 and $65 per barrel due to any unplanned supply outage and a fall in the US and global crude oil inventories.  

Read US Natural Gas Futures Could Rise in 2018 for the latest updates on natural gas.

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