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James Hyerczyk
Crude Oil Pump
Crude Oil Pump

U.S. West Texas Intermediate crude oil futures are trading higher early Thursday following a steep sell-off the previous session. The selling was fueled by concerns over rising U.S. inventories and after news that Saudi Arabia and Russia said they would increase output to at least partly make up the shortfall from the expected shortages caused by the Iranian sanctions.

At 1105 GMT, November WTI crude oil futures are trading $74.41, up $0.09 or +0.11%.

Daily November WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $76.90 will signal a resumption of the uptrend. The main trend will change to down on a trade through $67.69.

The minor trend is down. It turned down on Thursday when sellers took out $74.30. This shifted momentum to the downside.

The short-term range is $71.47 to $76.90. Its 50% level or pivot at $74.19 is new support. This level stopped the selling on Thursday.

The main range is $67.79 to $76.90. Its retracement zone at $72.35 to $71.27 is the primary downside target. A break into this zone will likely attract buyers since the main trend is up.

The major support is the long-term Fibonacci level at $70.86.


Daily Technical Forecast

Based on yesterday’s close at $74.33 and the early price action, the direction of the November WTI crude oil futures contract on Friday is likely to be determined by trader reaction to the short-term pivot at $74.19.

Bullish Scenario

A sustained move over $74.19 will indicate the presence of buyers. This could lead to a labored rally, however, due to a series of downtrending Gann angles at $74.90, $75.90, $76.40 and $76.70. The latter is the last potential resistance angle before the $76.90 main top.

A breakout over $76.90 will indicate the buying is getting stronger. This could lead to an eventual test of the November 21, 2014 main top at $80.10.

Bearish Scenario

A sustained move under $74.19 will signal the presence of sellers. The daily chart is wide open to the downside under this level with the next major target the 50% level at $72.35.

This is followed by an uptrending Gann angle at $71.54 and Fibonacci level at $70.86.

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