NEW YORK (TheStreet) -- Crude oil futures are expected to trade higher, finding support from China's economic releases. The hurricane season could also drive prices higher. Adding to that, confidence among U.S. consumers is expected to rise, as per the University of Michigan.
However, analysts do not rule out an initial correction at the beginning of the week. A buildup in crude oil inventory and a decline in the eurozone third-quarter GDP could also pressure oil prices.
December crude oil futures traded in the green and settled higher at $86.85 levels for the week, up 6.6% from last week. According to the Fibonacci principle, crude breached the crucial resistance level of $85.11 last week and is poised to touch $88.35. The weekly momentum indicator, RSI-14, is treading at 0.61 and is showing the potential for an upside in crude prices. Analysts expect prices to trade higher and recommend buying at the support levels.
Gas prices are expected to continue to be bearish, same as last week. An increase in short positions and contraction in long positions indicates a bearish market sentiment. The drop in gas prices was sharper than the prior week, whereas the buildup in inventory levels was much higher.
Economic data from China are expected to have a positive impact on the economy, which may support gas prices. However, analysts expect gas prices to drift lower at the beginning of the week, and anticipate higher storage levels and growing rig count to pressure gas prices mid-week.
Natural gas future prices ended on a bearish note, down -2.5 % from the prior week. Gas prices hit a low of $3.743 and settled at $3.937 levels. Natural gas is showing a trend channel formation on the downside that could push prices lower. The weekly momentum indicator RSI 14 is treading at the 0.318 level and is showing the potential for further downside. The market is trading below all the short-term and medium-term exponential moving averages (9, 18 and 45), implying a decline in gas prices.
Integrated oil and gas majors Exxon Mobil(XOM_), Total(TOT_), BP(BP_), ConocoPhillips(COP_), and Chevron(CVX_) increased 4.3%, 5.8%, 7.6%, 3.1% and 3.1%, respectively.
