Crude Oil Price Update – Strengthens Over $75.29, Weakens Under $74.85

U.S. West Texas Intermediate Crude Oil futures are trading higher shortly before the regular session opening. The market is being supported by renewed concerns over the impact of the Iranian sanctions on supply. Traders are also watching Hurricane Michael which is expected to hit the eastern Gulf states including Florida. Ahead of the hurricane making landfall late Tuesday or early Wednesday, oil companies operating in the Gulf of Mexico have shut down nearly 20 percent of oil production.

At 1133 GMT, December WTI Crude Oil is trading $74.63, up $0.46 or +0.63%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside last Friday. A trade through $76.72 will signal a resumption of the uptrend.

The minor trend is down. This shifted momentum to the downside. A trade through $72.98 will reaffirm the minor downtrend.

The main range is $67.74 to $76.72. Its retracement zone at $72.23 to $71.17 is the primary downside target. Since the main trend is up, look for buyers to come in on a test of this zone. An uptrending Gann angle passes through this zone at $71.99, making it a valid downside target also.

The new short-term range is $76.72 to $72.98. Its retracement zone at $74.85 to $75.29 is the first upside target. This zone is important to the structure of the chart pattern. Aggressive counter-trend sellers are going to try to stop the rally on a test of this zone in an effort to form a secondary lower top. Trend traders are going to try to drive the market through this zone in an effort to make $72.98 a new main bottom.

Daily Technical Forecast

Based on the early price action the direction of the December WTI crude oil market the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at $74.72.

A sustained move under $74.72 will indicate the presence of sellers. This could lead to a retest of $72.98. Breaking this minor bottom could extend the selling into $72.23 and $71.99.

Overtaking $74.72 and the 50% level at $74.85 will indicate the buying is getting stronger. This could trigger a move into the Fib at 75.29 and a downtrending Gann angle at $75.72. This is another trigger point for an acceleration into the next downtrending Gann angle at $76.22. This is the last major resistance angle before the $76.72 main top.