Crude Oil Price Update – Will Continue to Take Beating Until Market Finds Value Zone

U.S. West Texas Intermediate crude oil futures plunged on Thursday as traders continued to react to bearish reports on rising crude supply as well as fresh worries about weak global growth. Traders are concerned that with Russia, the U.S. and Saudi Arabia pumping a combined 33 million barrels per day, the balance for oil could flip back into surplus next year.

At 1715 GMT, December WTI Crude Oil is trading $63.32, down $1.99 or -3.05%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The market is in no position to change the main trend to up. This type of chart pattern typically ends with the formation of a dramatic closing price reversal bottom.

Earlier on Thursday, sellers took out the August 16 main bottom at $63.48. The downside momentum created by the move indicates it’s just a matter of time before the market trades down to the June 18 bottom at $62.32.

Daily Technical Forecast

The daily chart indicates that besides heavy downside momentum, a steep downtrending Gann angle from the $76.72 main top is controlling the price action. This angle, moving down at a rate of $0.50 per day, has been guiding prices lower since October 3 or for 21 trading sessions. The Gann angle is at $66.22 on Thursday and will drop to $65.72 on Friday.

Lower prices are to be expected as long as crude oil remains under this important resistance angle.