Crude Oil Price Update – Reaction to $81.83 Sets Thursday’s Early Tone

U.S. West Texas Intermediate crude oil plunged on Wednesday, hit by a jump in the U.S. Dollar and fear of additional supply after President Joe Biden said his administration was looking for ways to reduce energy costs amid a broader surge in inflation.

At 21:45 GMT, December WTI crude oil futures are trading $81.24, down $2.91 or -3.46%.

U.S. crude futures dropped sharply at the end of the session as traders sold out of riskier assets, including stocks and commodities, driven by expectations that central bankers will take steps to curb rising prices.

Essentially, a rise in consumer inflation boosted the greenback, which weighed on demand for the dollar-denominated commodity.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, Wednesday’s outside move reversal may be signaling a shift in momentum.

A trade through $84.97 will signal a resumption of the uptrend. A move through $78.25 will change the main trend to down.

The short-term range is $85.41 to $78.25. The market is currently trading on the weak side of its pivot at $81.83.

The next potential support targets come in at $80.04 and $79.12. If $78.25 fails as support then look for the selling to possibly extend into another pair of potential support levels at $76.91 and $76.23.

Daily Swing Chart Technical Forecast

The direction of the December WTI crude oil market early Thursday is likely to be determined by trader reaction to $81.83.

Bearish Scenario

A sustained move under $81.83 will indicate the selling pressure is getting stronger. This could trigger a further decline into $80.04, followed by $79.12 and the main bottom at $78.25.

Bullish Scenario

A sustained move over $81.83 will signal the presence of buyers. This could trigger a quick retracement into $82.89.

Sellers could return on a test of $82.89, but overcoming this level could extend the rally into $84.97 and $85.41.