Markets

Current Crude Oil Prices at $50.78 – Here's What's Next

Current crude oil prices remain below $52 a barrel today (Friday). This comes at the end of a week that has seen a 3.8% drop so far.

By 10:30 a.m. today, WTI oil prices were down 0.74% to $50.78 a barrel.

Brent crude prices traveled in the opposite direction. Futures for April delivery traded up 0.22% at $60.34. Brent closed at a 2015 high on Tuesday, ending the day at $63 a barrel.

What's behind this week's fall in current crude oil prices is a new report from the Energy Information Administration ( EIA ). Released Thursday, the report said U.S. stockpiles reached 425.6 million barrels last week. That's a 7.7 million barrel increase from the previous week, more than double the amount projected by analysts surveyed by Platts.

But this week's drop is just more short-term volatility as oil levels off. In fact, looking at the big picture, prices have already started to stabilize...

How to Increase Your Investment Returns, Starting Today:Many investors have three habits that kill returns. One of them is "emotional investing." Find out the other two and how to avoid them in our free guide:Make 2015 Your Wealthiest Year Yet

Despite recent pullbacks, WTI and Brent are up 6% and 19% in the last month. And according to Money Morning Global Energy Strategist Dr. Kent Moors, current crude oil prices will not continue to drop. He says they've already bottomed.

"While oil is not going to surge in the short-term," Moors explained, "oil prices should begin to level off, absent any major geopolitical tension beyond the levels we're already seeing."

Here's what will push oil higher...

Why Current Crude Oil Prices Will Return to $70 Range

Oil producers are taking measures that will tighten supply, while demand continues to rise. Together, these forces will allow the oil market to gradually correct.

The rig count is already down as companies take production offline because of low prices. Last week, Baker Hughes Inc. (NYSE: BHI ) reported the number of active U.S. rigs fell by 84 to 1,056, the lowest since August 2011.

"The reaction to the oil price decline in the U.S. has been pronounced," Moors notes. "The rig count has fallen dramatically to levels not witnessed in over a decade. In addition, operating companies are mothballing more expensive projects and trimming capital expenses."

While supply tightens up as fewer companies are producing, demand continues to climb. The International Energy Agency projects global oil demand will go from 910,000 barrels per day this year to 1.13 million in 2016.

That's why Moors sees oil hitting somewhere in the $70s by the fourth quarter of 2015.

Moors just outlined his strategies to profit from crude oil prices' rebound. Here's how you can find the sector's biggest gains.

Follow me on Twitter:@AlexMcGuire92

Related Articles :

  • MarketWatch: If History Is a Guide, Oil Could Rebound in May

To get full access to all Money Morning content including our latest Premium Report, "How to Make 2015 Your Wealthiest Year Ever," click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience - for free . Our experts - who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV - deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Disclaimer: © 2014 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities

Latest Markets Videos