Crude Oil Price Update – Weak Dollar Helps Fuel Breakout Ahead of Next Week’s Start of OPEC+ Production Cuts

U.S. West Texas Intermediate crude oil futures impressed traders significantly with a robust gain of nearly 3% on Wednesday. The market was primarily supported by a weaker greenback, which led to increased demand for the dollar denominated asset by foreign traders.

But the focus quickly shifted to bullish news from the government’s weekly inventories data. This time it wasn’t the headline grabbing crude oil, gasoline and distillate figures driving prices higher, but rather record U.S. crude exports and unusual demand from refiners that provided the bullish spark.

At 20:48 GMT, December WTI crude oil is trading $88.18, up $2.86 or +3.35%. Additionally, the United States Oil Fund ETF (USO) settled at $72.96, up $2.35 or 3.33%.

Wednesday’s rally was primarily fueled by short-term fundamental news, but this only helped the underlying potentially bullish longer-term fundamentals. They include the OPEC+ supply cuts that are supposed to kick in on November 1 and the European Union’s ban on oil imports from Russia that are expected to impact global supplies sometime later in November.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $92.34 will reaffirm the uptrend. A move through $81.30 will change the main trend to down.

The minor trend is also up. It changed to up on Wednesday when buyers took out the previous minor swing top at $87.14. This shifted momentum back to the upside.

The rally on Wednesday also cleared a few resistance hurdles that had been holding the market back. These 50% levels are now called support at $86.82, $85.49 and $84.02.

On the upside, the nearest resistance is a long-term 50% level at $93.28.

Daily Swing Chart Technical Forecast

Trader reaction to $86.82 is likely to determine the direction of the December WTI crude oil market early Thursday.

Bullish Scenario

A sustained move over $86.82 will indicate the presence of buyers. This could fuel an eventual acceleration to the upside since the daily chart shows no resistance until the main top at $92.34, followed by the long-term Fibonacci level at $93.28.

Bearish Scenario

A sustained move under $86.82 will signal the presence of sellers. This is not likely to fuel a steep sell-off, but it could trigger the start of a labored break with potential support levels at $85.49 and $84.02.