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James Hyerczyk
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WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished higher on Friday after recovering from early session weakness. The early sell-off was fueled by concerns over whether OPEC and its allies would agree to deepen production cuts when they meet on December 5-6, and renewed uncertainty over a trade deal between the United States and China after President Trump said he had not agreed to rollback tariffs as previously reported the day before.

On Friday, December WTI crude oil futures settled at $57.24, up $0.09 or +0.16%.

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The price action suggests that the intraday short-sellers may not have believed Trump. This shifted investor sentiment as investors renewed their optimism over a trade deal, triggering Friday’s short-covering rally.

Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $57.88 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at $53.71.

The minor trend is down. It turned down on Friday. This move changed momentum to the downside.

The main range is $62.74 to $50.89. Its retracement zone at $56.81 to $58.21 is resistance. This zone is also controlling the near-term direction of the market. Last week, this zone stopped the rally at $57.88 on November 7. The market also closed on Friday inside this zone.

The intermediate range is $59.11 to $50.89. Its retracement zone at $55.97 to $55.00 is new support.

The short-term range is $50.89 to $57.88. If the sell-off resumes then its retracement zone at $54.39 to $53.56 will become the primary downside target.

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Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $57.24, the direction of the December WTI crude oil market on Monday is likely to be determined by trader reaction to the main 50% level at $56.81.

Bullish Scenario

A sustained move over $56.81 will indicate the presence of buyers. The first targets are the minor top at $57.88 and the main Fibonacci level at $58.21. Overcoming $58.21 will indicate the buying is getting stronger. This could trigger a further rally into the September 23 top at $59.11.

Bearish Scenario

A sustained move under $56.81 will signal the presence of sellers. The first target is the intermediate Fibonacci level at $55.97. This is a potential trigger point for a break into the intermediate 50% level at $55.00.

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