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James Hyerczyk
WTI Crude Oil

U.S. West Texas Intermediate crude oil futures are trading lower, but off their lows, following a second day of heavy selling pressure. Oil prices were hit on two fronts early Thursday. After a lower opening was fueled by worries that President Trump would ease up on the sanctions against Iran, prices fell further after OPEC and its allies failed to make a decision on deeper supply cuts.

At 17:40 GMT, November WTI crude oil futures are trading $54.69, down $0.97 or -1.74%.

Oil came under further pressure after the European Central Bank (ECB) made a couple of major moves to prop up Euro Zone growth, including cutting is deposit rate to a record low -0.5% from -0.4% and restarting its bond purchases of 20 billion Euros a month from November.

Also weighing on prices were bearish comments from the International Energy Agency (IEA). It said surging U.S. output would make balancing the market “daunting” in 2020.

Daily November WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on September 10 at $58.64.

The main trend will change to down on a trade through $52.71. A move through $58.64 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is down. It changed to down on Thursday when sellers took out the swing bottom at $54.75. This move also confirmed the shift in momentum to down.

The main range is $63.52 to $50.48. Its retracement zone at $57.00 to $58.54 is resistance. This area stopped the rally at $58.64 on September 10.

The short-term range is $50.48 to $58.64. Its retracement zone at $54.56 to $53.60 is potential support. This zone stopped the rally earlier today at $53.93.


Daily Technical Forecast

Based on the earlier price action and the current price at $54.69, the direction of November WTI crude oil futures contract into the late session close is likely to be determined by trader reaction to the short-term 50% level at $54.56.

Bullish Scenario

A sustained move over $54.56 will indicate the presence of buyers. We’re not looking for much of an intraday retracement, however.

Bearish Scenario

A sustained move under $54.56 will signal renewed selling pressure. This could extend the selling into the short-term Fibonacci level at $53.60.

If $53.60 fails then look for a potential acceleration into the main bottom at $52.71. Taking out this bottom will change the main trend to down with sellers likely setting their sights on the next main bottom at $50.48.

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