Goldman Sachs’s views on oil prices
Goldman Sachs (GS) slashed its average WTI and Brent crude oil price estimates to $55.50 and $62.50 per barrel this year, from $64.50 and $70, respectively. Concerns about an economic slowdown could be behind the lower forecast, which still implies a 15.7% upside for WTI.
US crude oil last week
Between December 28 and January 4, US crude oil February futures rose 5.8% and closed at $47.96. US equity indexes’ recovery might have limited oil’s downside.
Important price points
For US crude oil, its 20-day and 50-day moving averages of $48.35 and $54.61, respectively, are important resistance zones. On the upside, $50.26 could be important for US crude oil until January 11.
A rise in oil prices could boost oil-weighted stocks. California Resources (CRC), Callon Petroleum (CPE), and Denbury Resources (DNR), the strongest oil-weighted stocks, rose 14%, 14%, and 27.3%, respectively, last week. Any changes in US crude oil prices could affect US equity indexes such as the S&P 500 (SPY) and Dow Jones Industrial Average (DIA), which we’ll discuss next.