Crude Oil Price Update – Could Strengthen Over $84.19, Weaken Under $83.10

U.S. West Texas Intermediate crude oil futures are edging higher shortly after the New York opening on Tuesday after recovering from an early session setback. The turnaround in the market could mean that bullish traders have set their sights on a new multi-year high. The catalysts behind the market’s strength is a global supply shortage and strong demand in the United States, the world’s biggest consumer.

At 12:14 GMT, December WTI crude oil futures are trading $84.15, up $0.39 or +0.47%.

Anticipated cold weather in Europe is one reason for the rally. Traders believe that earlier-than-expected cold temperatures will encourage power generators to burn crude oil rather than more expensive gas or coal.

Later today at 20:30 GMT, the American Petroleum Institute (API) will release its weekly inventories report for the week-ending October 22. Crude oil stockpiles are forecast to have risen by 1.7 million barrels last week while gasoline and distillate inventories were expected to have fallen, according to a Reuters poll of analysts.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $85.41 will signal a resumption of the uptrend. A move through $80.78 will change the main trend to down.

The minor trend is also up. The new minor top is $85.41.

The minor range is $85.41 to $82.97. Its 50% level or pivot is $84.19.

The second minor range is $80.78 to $85.41. Its 50% level at $83.10 stopped the selling earlier today.

A third minor range is $78.78 to $85.41. Its 50% level or pivot at $82.10 is additional support.

Daily Swing Chart Technical Forecast

The direction of the December WTI crude oil market on Tuesday is likely to be determined by trader reaction to $83.10 and $84.19.

Bearish Scenario

A sustained move under $83.10 will signal the presence of sellers. This could trigger a break into $82.10. Buyers could come in on the first test. If it fails as support then look for the selling to possibly extend into the main bottom at $80.78. Taking out this level will change the main trend to down.

Bullish Scenario

A sustained move over $84.19 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly lead to a test of $85.25 to $85.41.

Overcoming and sustaining a rally over $85.41 will indicate the buying is getting stronger. This could trigger an acceleration to the upside since the next major target doesn’t come in until $89.93.