Crude Oil Price Update – In Window of Time for Closing Price Reversal Bottom

U.S. West Texas Intermediate crude oil prices are trading slightly higher early Thursday. The market is trading inside yesterday’s range after failing to follow-through to the downside following Wednesday’s steep sell-off. Supply concerns are weighing on prices after the U.S. Energy Information Administration (EIA) reported a larger-than-expected inventory build and that U.S. production hit a record 11.6 million bpd in the week-ending November 2. The U.S. is now the world’s biggest producer of crude oil.

At 0737 GMT, December WTI crude oil is trading $61.85, up $0.18 or +0.29%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. In fact, the market has been so bearish that it hasn’t been able to produce a two-day upswing since October 3. The market isn’t close to changing the trend to up, but due to the prolonged move down in terms of price and time, it may be ripe for a closing price reversal bottom.

The formation of a closing price reversal bottom will indicate the buying is greater than the selling at current price levels. This could trigger the start of a 2 to 3 day counter-trend rally.

Recapturing a pair of former bottoms at $63.32 and $63.48 will also indicate short-covering is taking place. A trade through $61.20 will signal a resumption of the downtrend with the April 4 bottom at $59.70 the next likely downside target.

The minor trend is also down. A trade through $61.14 will change the minor trend to up. This will also shift momentum to the upside.

Daily Technical Forecast

The direction of the December WTI crude oil market on Thursday is likely to be determined by trader reaction to yesterday’s low at $61.20.

Taking out $61.20 will be a sign of weakness with $59.70 the next downside target.

Holding $61.20 will indicate the return of buyers. Overcoming $62.32 and $63.48 will indicate the buying is getting stronger. Look for selling on the first test of the downtrending Gann angle at $63.72, but prepare for a strong breakout to the upside if buyers can overcome the Gann angle and the minor top at $64.14.

Taking out $61.20 then turning higher for the day on a move over yesterday’s close at $61.67 will put the market in a position to form a potentially bullish closing price reversal bottom.