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March Crude Oil Monthly Technical Analysis for December 2016

By:
James Hyerczyk
Updated: Dec 7, 2016, 07:04 UTC

West Texas Intermediate and Brent crude oil futures rallied in November after OPEC agreed to a plan to cut production. The plan calls for the oil cartel

crude-oil-monthly

West Texas Intermediate and Brent crude oil futures rallied in November after OPEC agreed to a plan to cut production. The plan calls for the oil cartel to cut its overall production by 1.2 million barrels a day. Traders celebrated the long-awaited deal by driving prices up nearly 10% per barrel.

The deal calls for OPEC to set a new production ceiling at 32.5 million barrels a day starting in January 2017. This amount is about 33.6 million barrels a day lower than the cartel pumped in October.

The plan to cut production is expected to reduce the global supply glut and boost prices.

Technical Analysis

The main trend is down on the monthly February WTI crude oil chart. The trend will turn up on a trade through $53.82. If this occurs then $42.99 will become the new swing bottom.

The short-term range is $65.63 to $35.10. Its retracement zone at $50.37 to $53.97 is currently acting like resistance. Overtaking this zone will also put the market in a bullish position.

The main range is $91.03 to $35.10. Its retracement zone at $63.07 to $69.66 is the primary upside target.

monthly-wti-crude-oil
Monthly February WTI Crude Oil

Forecast

Look for a bullish tone to develop on a sustained move over $50.37 and a bearish tone on a sustained move under $46.10.

Overtaking $50.37 with conviction should send the market into $53.82 and $53.97. If $53.97 is taken out then look for a rally into an uptrending angle at $57.10.

Crossing to the strong side of the angle at $57.10 could create enough upside momentum to challenge the resistance cluster at $63.03 to $63.07.

The news is bullish so there should be a bias to the upside throughout the month. However, if there are any issues with the production deal then the market could remain rangebound.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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