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James Hyerczyk
Crude Oil

U.S. West Texas Intermediate crude oil futures fell for a second session on Wednesday after President Trump ordered the Treasury Department to “substantially increase” sanctions on Iran. In other news, U.S. crude oil inventories increased 1.1 million barrels from the previous week, according to the Energy Information Administration (EIA). Traders were looking for a decrease of 2.1 million barrels.

At 19:51 GMT, November WTI crude oil futures are trading $58.07, down $1.03 or -1.74%.

Daily November WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $63.89 will signal a resumption of the uptrend. The main trend will change to down on a move through $53.93.

The major retracement zone resistance is $59.29 to $62.64. This zone is controlling the longer-term direction of the market. Wednesday’s price action has put the market on the weak side of this zone.

The short-term range is $53.93 to $63.89. Its retracement zone at $58.91 to $57.73 is currently being tested. So far this zone is holding as support.


Daily Technical Forecast

Based on Wednesday’s price action and the current price at $58.07, the direction of the November WTI crude oil futures contract into the extended close is likely to be determined by trader reaction to the support cluster at $57.73. This cluster is being formed by an uptrending Gann angle and the short-term Fibonacci level.

Bullish Scenario

Holding $57.73 will indicate the presence of buyers. Overcoming the uptrending Gann angle at $57.93 will indicate the buying is getting stronger. This could trigger a rally into a pair of 50% levels at $58.91 and $59.29 and a downtrending Gann angle at $59.89.

Taking out $59.89 will trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $57.73 will signal the presence of sellers. The next two downside targets are uptrending Gann angles at $55.93 and $54.93.


Friday to Monday’s price gap is still intact. The downside momentum suggests sellers are going to try to fill it, but it doesn’t make sense if traders are going to place a risk premium on the market due to elevated tensions between the United States and Iran. Furthermore, traders still aren’t sure if the Saudi production facilities will be fully repaired by the end of the month.

However, I suspect that someone is betting the facilities will be repaired sooner, which may be one reason for the selling pressure.

If the market holds $57.73 and is about to overcome $59.29 then assume the risk premium is still there.

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