VelocityShares 3x Inverse Crude Oil ETN (DWT)

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Crude Oil Prices: Key Support and Resistance Levels

Market Realist By Gordon Kristopher

5 hours ago

March 15, 2016

US Crude Oil Inventory Report: Will It Overshadow the Bull Market?

(Continued from Prior Part)

Short-term crude oil price trends
Crude oil prices have been on a roller coaster ride since the beginning of 2016. Oil prices have rallied more than 40% since the low in February 2016. On the other hand, oil prices have fallen by 65% since June 2014. The delay in oil producers’ meeting and record US crude oil inventories are limiting the upside for crude oil prices.


Key support and resistance
Rising US crude oil inventories could push crude oil prices lower. The estimates of rising supplies from Iran could also push oil prices lower. The important support level for crude oil prices is seen at $25 per barrel. Prices tested this mark in 2003. In contrast, oil producers’ meeting and estimates of the slowing US crude production and oil rig count could support crude oil prices. The next resistance for crude oil prices is seen at $45 per barrel. Prices tested this level in October 2015.

Crude oil price forecast
The forward curve suggests higher crude oil prices in the future. WTI (West Texas Intermediate) December 2020 crude oil futures contracts were trading at $48.92 per barrel as of March 15, 2016. In contrast, Goldman Sachs (GS) lowered the crude oil price forecasts for 2016 and 2017. Goldman Sachs forecasts that Brent crude oil prices will average $39 per barrel in 2016 and $60 per barrel in 2017. It estimates that WTI’s crude oil price forecast will average $38 per barrel in 2016 and $58 per barrel in 2017.

Multiyear low crude oil prices will impact oil and gas producers like Oasis Petroleum (OAS), Northern Oil & Gas (NOG), Triangle Petroleum (TPLM), Halcon Resources (HK), and Sanchez Energy (SN).

ETFs and ETNs like the iShares U.S. Energy ETF (IYE), the iShares U.S. Oil Equipment & Services ETF (IEZ), the Direxion Daily Energy Bull 3x Shares ETF (ERX), and the VelocityShares 3x Inverse Crude Oil ETN (DWTI) are also influenced by uncertainty in the oil market.

http://finance.yahoo.com/news/crude-oil-prices-key-support-134922750.html