Crude Oil Price Update – Look Out Below if $47.80 Fails as Short-Term Support

U.S. West Texas Intermediate crude oil futures are drifting lower on Thursday as traders square positions ahead of the weekend and the major OPEC+ summit on January 4 that could have a major impact on supply and the direction of the market over the near-term.

At 15:03 GMT, February WTI crude oil is trading $48.01, down $0.39 or -0.81%.

At the meeting, OPEC+ policymakers are expected to boost output by 500,000 barrels per day in January, but the market moving event will be any comments about an output decision for February.

Ahead of the weekend, worries over demand have surfaced with new concerns over restrictions and lockdowns due to the discovery of a new variant of coronavirus in the U.K., parts of Europe and the United States.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the market is starting to show signs of a shift in momentum with the possible formation of a secondary lower top at $48.96 this week.

A trade through $49.43 will signal a resumption of the uptrend. The main trend will change to down on a move through $46.16.

The minor range is $49.43 to $46.16. Its 50% level at $47.80 is support. It is also controlling the near-term direction of the market.

The major support is the Fibonacci level at $46.04. Breaking this level could trigger the start of a steep sell-off.

Daily Swing Chart Technical Forecast

The direction of the February WTI crude oil market into the close on Thursday will likely be determined by trader reaction to the 50% level at $47.80.

Bullish Scenario

A sustained move over $47.80 will indicate the presence of buyers. The closest potential upside targets are $48.96 and $49.43.

Bearish Scenario

A sustained move under $47.80 will signal the presence of sellers. Under normal volume conditions, this could trigger a sharp break into $46.16 to $46.04.

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