Crude Oil Price Update – Trader Reaction to $50.60 Will Set the Tone for the Day

December West Texas Intermediate crude oil futures are trading higher on Tuesday, supported by Saudi Arabian export cuts in November and signs that the market is rebalancing after years of oversupply. Basically, prices are being boosted by news that the Saudis are planning to reduce its oil shipment to customers in November. This is in line with the country’s commitment to the OPEC-led production cuts.

Daily Technical Analysis

The main trend is up according to the daily swing chart. After a prolonged correction, the market looks like it’s ready to turn momentum back to the upside.

The crude oil market is finding support at a pair of retracement levels at $50.01 and $49.85. If this area fails then prices could plunge to $49.44 then $49.08.

The first target today is a 50% level at $50.60. This price was tested earlier in the session.

The short-term range is $53.11 to $49.44. If the upside momentum continues then its retracement zone at $51.27 to $51.71 will become the primary upside target.

Daily Forecast

Based on the current price at $50.52 and the earlier price action, the direction of the crude oil market the rest of the session will be determined by trader reaction to the 50% level at $50.60.

Taking out $50.60 and sustaining the rally will signal the presence of buyers. This could trigger an acceleration into the downtrending angle at $51.11. This is followed by the short-term 50% level at $51.27.

The inability to overcome $50.60 will indicate the presence of sellers. This could trigger a sharp break into a support cluster at $50.01, $49.97 and $49.85.

Look for an acceleration to the downside if $49.85 fails as support.