Crude Oil Price Update – Early Friday Weakness Under $79.04, Strength Over $80.53

U.S. West Texas Intermediate crude oil futures are inching lower late in the session on Thursday after trading mostly sideways throughout the day on low volume. Helping to cap gains were a stronger U.S. Dollar and a report that showed OPEC cut its 2021 oil demand forecast due to high prices.

At 21:30 GMT, January WTI crude oil is trading $80.04, down $0.02 or -0.02%.

On Thursday, the U.S. Dollar rose to an almost 16-month high against a basket of major currencies due to bets on interest rate hikes. The stronger greenback dampened foreign demand for dollar-denominated crude oil.

In other news, the rate at which demand returns may be dampened by higher energy prices according to the Organization of the Petroleum Exporting Countries (OPEC). The cartel said in a monthly report it expects oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, down 330,000 bpd from last month’s forecast.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower following the confirmation of Wednesday’s closing price reversal top.

A trade through $83.30 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $77.23 will reaffirm the downtrend.

The minor range is $83.83 to $77.23. Its 50% level or pivot at $80.53 is potential resistance.

On the downside, the potential support is a series of 50% levels at $79.04, $78.09, $76.22 and $75.25.

Daily Swing Chart Technical Forecast

The direction of the January WTI crude oil futures contract early Friday is likely to be determined by trader reaction to $80.53.

Bearish Scenario

A sustained move under $80.53 will indicate the presence of sellers. The first potential downside target is $79.04, followed by $78.09 and the main bottom at $77.23.

Taking out $77.23 will indicate the selling pressure is getting stronger. This could extend the selling into $76.22 and $75.25.

Bullish Scenario

A sustained move over $80.53 will signal the presence of buyers. If this move can generate enough upside momentum then look for a possible surge into $83.30 and $83.83.