Crude Oil Price Update – Sustained Move Over $58.21 Could Launch Strong RallyThe main range is $62.74 to $50.89. Its retracement zone at $56.82 to $58.21 is acting like resistance. It appears to be controlling the near-term direction of the market.
U.S. West Texas Intermediate crude oil futures were able to overcome early session weakness to trade higher late Friday. The move has also put the market in a position to close higher for the week.
In a move that demonstrated just how vulnerable the market is to news about U.S.-China trade relations, prices fell sharply early in the session following comments from U.S. President Donald Trump that he has not agreed to roll back tariffs on China. This came less than 24-hours after prices rose sharply after traders believed the U.S. and China had agreed to roll back tariffs.
Oil prices were also pressured by comments from OPEC Secretary-General Mohammad Barkindo, who said earlier in the week that he was more optimistic about the outlook for 2020, appearing to downplay any need to cut output more deeply.
Traders also shrugged off concerns over rising U.S. oil stockpiles after the Energy Information Administration reported that inventory rose as refineries cut output and exports dropped.
At 21:40 GMT, December WTI crude oil is trading $57.40, up $0.25 or +0.42%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has shifted to the downside. A trade through $57.88 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at $53.71.
The minor trend is down. It turned down on Friday when sellers took out the minor bottom at $56.11. This move shifted momentum to the downside.
The main range is $62.74 to $50.89. Its retracement zone at $56.82 to $58.21 is acting like resistance. It appears to be controlling the near-term direction of the market. This week, it stopped the rally every day, including November 7 when the high was reached at $57.88.
The intermediate range is $59.11 to $50.89. It acted like support all week with the market holding above its upper or Fibonacci level at $55.97.
Combining the two retracement zones creates support at $55.00 and resistance at $58.21. Unless these levels are taken out, the market is likely to remain rangebound over the near-term.
Overcoming the downtrending Gann angle at $57.87 will be a sign of strength.