Crude Oil Price Update – Strengthens Over $38.74, Weakens Under $37.77

U.S. West Texas Intermediate (WTI) crude oil futures are trading slightly lower early Thursday after surging nearly 4% the previous session after U.S. crude oil supplies fell sharply last week, as a hurricane cut production in the U.S. Gulf of Mexico. Gains were capped, however, by a mixed performance in fuels with gasoline stocks increasing and distillate inventories falling, the U.S. Energy Information Administration (EIA) said on Wednesday.

At 02:44 GMT, December WTI crude oil futures are trading $38.39, down $0.76 or -1.94%.

According to the EIA, crude inventories fell by 8 million barrels in the week to October 30, compared with analysts’ expectations for an increase of 890,000 barrels.

Gasoline stocks rose by 1.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 871,000-barrel drop. Distillate stockpiles, which include diesel and heating oil fell by 1.6 million barrels, versus expectations for a 2.0 million-barrel draw, the EIA data showed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $41.90 will change the main trend to up, while a move through $33.64 signals a resumption of the downtrend.

The minor trend is also down. A trade through $39.83 will change the minor trend to up. This will confirm the shift in momentum to up.

The main range is $25.31 to $44.33. Its retracement zone at $34.82 to $32.58 is support. Inside this zone is a main bottom at $33.64. The zone stopped the selling on Monday at $33.64.

The short-term range is $41.90 to $33.64. Its retracement zone at $37.77 to $38.74 is potential resistance. The market is currently straddling this area.

The new minor range is $33.64 to $39.25. Its 50% level at $36.45 is a potential downside target.

Daily Swing Chart Technical Forecast

The early price action indicates that the direction of the December WTI crude oil market on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at $38.74.

Bearish Scenario

A sustained move under $38.74 will indicate the presence of sellers. This could trigger a quick break into the short-term 50% level at $37.77. This is a potential trigger point for an acceleration into the minor pivot at $36.45.

Bullish Scenario

A sustained move over $38.74 will signal the presence of buyers. Taking out $39.25 will indicate the buying is getting stronger. This could trigger a rally into the minor top at $39.83. This price is a potential trigger point for an acceleration to the upside with the next major target the main top at $41.90.