Crude Oil Price Update – Holding Pivot Support at $81.83 Ahead of API Report

U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session after reversing earlier weakness. The move is being fueled by tight supply and optimism over the demand outlook.

The rally came ahead of the U.S. Energy Information Administration’s (EIA) release of oil and gasoline price predictions in its Short Term Energy Outlook (STEO), which U.S. President Joe Biden’s administration has said it would use to determine whether to release oil from the nation’s Strategic Petroleum Reserve (SPR).

At 17:31 GMT, December WTI crude oil is at $83.44, up $1.23 or +1.50%.

Despite a tight global market, analysts forecast that U.S. crude inventories rose for a third straight week, possibly helping to cap further gains in prices. The first of this week’s two supply reports, from industry group the American Petroleum Institute, is due later Tuesday at 21:30 GMT.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $84.88 will change the main trend to up. A move through $78.25 will reaffirm the downtrend.

The minor trend is also down. A trade through $83.42 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is $85.41 to $78.25. The market is currently trading on the strong side of its pivot at $81.83, making it new support.

Additional support is a pair of 50% levels at $80.04 and $79.12.

Daily Swing Chart Technical Forecast

The direction of the December WTI crude oil market into the close on Tuesday is likely to be determined by trader reaction to $81.83.

Bullish Scenario

A sustained move over $81.83 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the minor top at $83.42.

Taking out $83.42 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the main tops at $84.88 to $85.41 the next likely targets.

Bearish Scenario

A sustained move under $81.83 will signal the presence of sellers. This is potential trigger point for an acceleration to the downside with $80.04 – $79.12 the next potential downside targets.