Crude Oil Price Update – Needs to Clear $79.33 to Confirm Shift in Momentum to Up
U.S. West Texas Intermediate crude oil futures are inching lower late in the session on Wednesday in a lifeless trade ahead of Thursday’s U.S. Thanksgiving holiday. The market is closed tomorrow, but open on Friday. However, we don’t expect much movement with traders likely to take a long holiday weekend ahead of the OPEC+ meeting on December 2.
At 19:08 GMT, January WTI crude oil futures are trading $78.30, down $0.20 or -0.25%.
Helping to limit the price action is trader debate over the effectiveness of a U.S.-led release of oil from strategic reserves and how producers will respond. The initial response on Tuesday was bullish, meaning the move to supply more crude oil will be ineffective. Or as analysts at Goldman Sachs put it, “A drop in the ocean.”
In other news, U.S. crude stockpiles rose 1 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations for a decrease of 481,000 barrels.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, but momentum is trending higher. A trade through $74.76 will signal a resumption of the downtrend, while a move through $83.30 will change the main trend to up.
The minor trend is down. A trade through $79.33 will change the minor trend to up. This will confirm the shift in momentum.
On the upside, the nearest resistance is a 50% level at $79.29.
On the downside, the nearest support is $78.09. This is followed by a pair of 50% levels at $76.22 and $75.25.
Daily Swing Chart Technical Forecast
The direction of the January WTI crude oil futures contract into the close on Wednesday is likely to be determined by trader reaction to the pair of 50% levels at $79.29 and $78.09.
Look for an upside bias to develop on a sustained move over $79.29 and for the downside bias to resume on a sustained move under $78.09.