Crude Oil Price Update – Trying to Establish Support Base Inside Major Retracement Zone

U.S. West Texas Intermediate crude oil futures are inching higher on Friday on speculation OPEC and other non-OPEC countries are planning to start withholding supply soon. Putting a lid on prices, however, are concerns over rising U.S. production. On Thursday, the U.S. Energy Information Administration reported a 10.3 million barrel surge in inventories in the week-ending November 9 to 442.1 million barrels, the highest level since early December 2017.

At 0638 GMT, January WTI crude oil futures are trading $57.14, up $0.46 or +0.81%. For the week, it’s down about 6-percent.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $54.90 will signal a resumption of the downtrend. However, we expect a labored move since former bottoms are stationed at $54.90, $54.06 and $53.74.

The minor trend is also down. A trade through $61.44 will change the minor trend to up. This is followed by the next minor top at $64.14.

The only retracement zone we are concerned about is $58.95 to $54.79. This zone is based on a monthly trading range so it’s very important to the longer-term structure of the market.

Daily Swing Chart Technical Forecast

The next move by crude oil will be headline and momentum driven.

If the headlines are bullish then buyers will make a run at the major 50% level at $58.95. Overcoming this level will indicate the buying is getting stronger. If this generates enough upside momentum then look for the short-covering rally to extend into $61.44.

If the headlines are bearish then sellers will attempt to resume the downtrend by taking out $54.90. However, they may have a hard time driving prices sharply lower because of the cluster of potential support levels ranging from $54.79 to $53.74.