WTI should stay near current levels .....

[dan_s]

as long as the U.S. economy continues to improve.

WTI crude prices rose on the week

Last week, West Texas Intermediate (“WTI”) crude oil prices finished at $99.32 per barrel, compared to $96.60 per barrel the week prior. Over the week, the Federal Reserve noted that it would begin to cut back on its purchases of fixed income securities (which helps to fuel economic growth), citing a strengthening US economy. The market reacted positively to Fed’s language, as it signaled both a better US economy and a measured approach to tapering. Additionally, US GDP was reported to grow at a 4.1% annualized rate in 3Q13, revised upward from a previous estimate of 3.6%. This was a positive sign for the US economy, and signaled the potential for higher oil demand.

Note that WTI is more representative of the price that producers receive in the US and there is another benchmark for crude called Brent which is more representative of the price that producers receive internationally. As the domestic benchmark, WTI prices matter more for domestic companies such as Chesapeake Energy (CHK), Range Resources (RRC), EOG Resources (EOG), and Pioneer Natural Resources (PXD) than for companies with significant international exposure, where Brent prices might be more relevant to watch.

Oil prices have remained relatively high and stable, supporting energy company valuations

EOG will be the top oil producer in the U.S. within five years.