Why the WTI Crude Oil Price Is Up Today - July 2015

oilWhy the WTI crude oil price is up today, July 9, 2015: The WTI crude oil price surged today (Thursday) after a five-day decline as China's market sell-off waned and Iran's nuclear negotiations continued.

By 2:15 p.m., WTI oil prices were up 2.42% and trading at $52.91 a barrel.

The U.S. benchmark is on track to erase this week's losses if it settles above Monday's close of $52.68. WTI has had a rough month so far, plummeting 7.1% since July 1.

Brent oil prices surged even higher. The international benchmark ticked up 2.96% to $59.09 a barrel. It's currently down 5.4% in July.

Here's a breakdown of why the WTI crude oil price is up today...

Two Reasons Why the WTI Crude Oil Price Is Up Today

The main reason why the WTI crude oil price is up today is the huge rebound in China's stock market. Chinese shares made their biggest daily gain in six years today, with the Shanghai Composite Index surging 5.8%.

The Shanghai Index's turnaround came after losses in eight of the last 10 trading days. It has fallen 27.5% over the last month. Since China is one of the largest oil consumers in the world, the country's turmoil results in reduced demand and lower prices for oil.

Meanwhile, Iran and the six Western powers have yet to reach an agreement on the state of Iran's nuclear program. Congress could have an extra month to review the deal, which offers a bullish outlook for oil prices over that time. A deal would lift sanctions on Iran and allow it to flood the oil market with excess supply.

But these events won't drive oil prices up over the long term.

According to Money Morning Global Energy Strategist Dr. Kent Moors, there's a fundamental phenomenon happening right now that will push prices higher in 2015.

Here's why oil will be in the $73 to $78 range - or even higher - by the end of the year...

Why WTI Crude Oil Prices Will Hit $73 to $78 by December

The reason is simple supply and demand. The U.S. rig count is rapidly shrinking as the extraction levels of active rigs continue to fall.

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You see, significant oil can only be extracted from shale wells within the first 18 months. After that period of peak production, each well's output declines significantly until they dry out completely.

That's why Moors projects oil prices in the $73 to $78 range by the end of 2015.

"Between July and September of this year, production will finally start to decline from the wells that were recently put on line," Moors explained. "Remember, these are the wells that have provided most of the excess volume."

"The translation? Eventually, the glut will recede, and the market is going to hand us some highly profitable plays in short order..."

Read here for Moors' latest oil price profit plays...

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