VelocityShares Credit Suisse 3X Long Crude ETN (UWTIF)

[sludgehound]

Crude Oil Prices Are Trading within a Price Channel

http://finance.yahoo.com/news/crude-oil-prices-trading-within-133242473.html
Market Realist By Gordon Kristopher
7 minutes ago
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Crude Oil Market: Tug-of-War between the Bulls and Bears

(Continued from Prior Part)

Price channel
WTI (West Texas Intermediate) crude oil futures contracts for November delivery rose after falling for two consecutive days. Prices are trading close to the key resistance of $47 per barrel as of September 21, 2015. Crude oil prices have been trading within a downward trending price channel for the last 15 trading sessions. The consensus of falling inventory is driving crude oil prices.


Support and resistance
The speculation of slowing US crude oil production due to the falling rig count suggests that US crude oil production could fall much faster than anticipated. Goldman Sachs estimated that US production could fall by 250,000 bpd (barrels per day) in 3Q15. It could support crude oil prices. Crude oil prices could see resistance at $50 per barrel. Prices tested this level in August 2015. In contrast, rising production Iran, Iraq, and China could add to the oil glut market. Prices could test the nearest support of $38 per barrel. Crude oil prices hit this mark in August 2015.

Crude oil price estimate
The crude oil price chart suggests that WTI prices could average $42–$48 per barrel in the short term. The EIA (U.S. Energy Information Administration) estimates that US oil prices could average around $49 per barrel in 2015 and $54 per barrel in 2016. Goldman Sachs estimates that crude oil prices could trade lower over the long term due to oversupply concerns being more than estimated.

The volatility in the crude oil prices affects oil producers like ExxonMobil (XOM), QEP Resources (QEP), and EOG Resources (EOG). These companies account for 19.83% of the Energy Select Sector SPDR ETF (XLE). The companies’ crude oil production mix is more than 32% of their production portfolio.

ETFs like the Velocity Shares 3X Long Crude ETN (UWTI) benefit from rising crude oil prices. In contrast, lower crude oil prices benefit ETFs like the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).