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Will US Crude Oil Fall More?

PART:
1 2 3 4
Will US Crude Oil Fall More? PART 1 OF 4

Will US Crude Oil Fall Further?

US crude oil

On March 12, 2018, US crude oil April futures fell 1.1% and closed at $61.36 per barrel amid concerns about rising US crude oil production. This week, the $62 level could be an important resistance zone for US crude oil.

Will US Crude Oil Fall Further?

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On the same day, the EIA’s (U.S. Energy Information Administration) Drilling Productivity Report was released. Based on the report, US crude oil production from the major US shale regions could reach 6.95 MMbpd (million barrels per day) in April 2018. At this level, US crude oil production from the shale regions will be 40.1% higher on a year-over-year basis. So, US oil production from the shale regions is rising rapidly. In the next part, we’ll discuss US crude oil production. In Part 3, we’ll focus on the EIA’s inventory data.

On March 12, 2018, the S&P 500 Index fell 0.1%. Weakness in broader markets could also be behind oil’s fall.

On March 5–12, 2018, US crude oil April futures fell 1.9%. Energy ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the Energy Select Sector SPDR ETF (XLE), and the Fidelity MSCI Energy ETF (FENY) returned 0.1%, 1.1%, and 1%, respectively, in the seven calendar days to March 12, 2018.

Moving averages

On March 12, 2018, US crude oil active futures were 3.5% and 14.6% above their 100-day and 200-day moving averages. On the same day, US crude oil futures were 0.3% and 1.9% below their 20-day and 50-day moving averages. US crude oil prices below these shorter-term moving averages could indicate short-term weakness in oil prices.

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