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James Hyerczyk
WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished higher on Friday as support from an unexpected drop in U.S. crude inventories, optimism over a U.S.-China trade deal and speculation that OPEC and its allies may extend output cuts, offset concerns over the slowing global economy and lower demand growth. Last week’s gains were the biggest in more than a month.

On Friday, December WTI crude oil futures settled at $56.66, up $0.43 or +0.76%.

Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend turned up on October 23 when buyers took out the previous swing top at $54.99. The main trend will change to down on a trade through $52.46.

The minor trend is also down. A trade through $52.85 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $62.74 to $50.89. Its retracement zone at $56.81 to $58.21. Profit-takers and aggressive short-sellers could come in on a test of this area.

The intermediate range is $59.11 to $50.89. Its retracement zone at $55.97 to $55.00 is a potential support zone.

The minor range is $52.46 to $56.74. Its 50% level at $54.60 is also potential support.

The short-term range is $50.89 to $56.74. Its retracement zone at $53.82 to $53.12 is a value area and could be attractive for buyers if tested.


Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $56.66, the direction of the December WTI crude oil market on Monday is likely to be determined by trader reaction to the main 50% level at $56.81.

Bullish Scenario

Taking out $56.81 and sustaining the move will indicate the presence of buyers. If this move attracts enough buyers, we could see an acceleration to the upside with the main Fibonacci level at $58.21 the next major upside target.

Bearish Scenario

A sustained move under $56.81 will signal the presence of sellers. If this move generate enough downside momentum then look for a break into the intermediate Fibonacci level at $55.97. Since the main trend is up, buyers could come in on the first test of this level. If it fails as support then look for the selling to possibly extend into the intermediate 50% level at $55.00.

Side Notes

The key area to watch this week is $56.81 to $58.21. This zone represents 50% to 61.8% of the break from the September Saudi production facility attack top to the early October global demand concerns low. Trader reaction to this zone could determine the near-term direction of the market.

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