Attacks on Saudi Arabia Keep Supply Risk Bid Under Crude
WTI and Brent crude oil futures are trading higher on Thursday. Middle East oil is still moving. The problem is that every new attack makes traders wonder whether those barrels will keep moving.
At 14:08 GMT, December WTI crude oil futures are trading $99.07, up $1.92 or +1.98%. December Brent crude oil futures are trading $111.72, up $2.90 or +2.66%.
Daily December WTI Crude Oil Futures Technical Analysis
December WTI crude oil futures are edging higher on Thursday after the market crossed to the strong side of a minor pivot at $98.31 earlier in the session. Bullish traders are hoping to build on the move with a confirmation of the uptrend.
The main trend is up according to the daily swing chart. A trade through $101.37 will reaffirm the uptrend. The main trend will change to down on a trade through the swing bottom at $86.00.
On Tuesday, the market formed a potentially bearish closing price reversal top. Now it’s a race between bullish and bearish traders to either negate the pattern on a breakout over $101.37 and resume the rally, or take out $95.25 and confirm the chart pattern and possibly lead to a two-to-three-day correction. Traders should note that the confirmation of a closing price reversal top will not change the trend, but it could alleviate some of the excess upside pressure.
The minor trend is also up. A trade through $92.46 will change the minor trend to down.
The short-term range is $86.00 to $101.37. Its retracement zone is potential support at $93.69 to $91.87.
Brent Oil Price Forecast
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See all Brent Oil forecastsDaily December Brent Crude Oil Futures Technical Analysis
December Brent crude oil futures are also edging higher on Thursday. The main trend is up according to the daily swing chart. Today’s rally through $111.99 reaffirmed the uptrend, while negating the closing price reversal chart pattern that had formed on Tuesday. The main trend will change to down on a break through the swing bottom at $95.12.
The minor trend is also up. A trade through $105.95 will change the minor trend to down.
The nearest support is the retracement zone at $104.53 to $102.84. With the main trend up, new buyers may find this area attractive.
Middle East Attacks Are the Trade
Middle East crude exports were near 17 million barrels per day last week. That should be enough to calm the supply trade. It has not been enough to calm crude buyers.
Middle East oil is still moving. The problem is that every new attack makes traders wonder whether those barrels will keep moving. Houthi attacks reached Saudi targets, including an oil field. Iran also reported vessel attacks and mines near the Strait of Hormuz.
Potential peace talks between Russia and Ukraine are the main risk to the oil rally, but they are not expected to resume until next month. Additionally, there is no agreement in place. Until the attacks stop or the security picture improves, peace-talk headlines are unlikely to take much of the risk premium out of crude.
What to Watch
My bias for December WTI crude oil futures is to the upside because of the swing-chart uptrend and the market’s strong build over the 50-day moving average at $88.40. The next upside targets are the September contract high at $106.75 and the May contract high at $107.77. A confirmation of the closing price reversal top will soften my outlook.
The resumption of the uptrend in December Brent crude oil futures and the strong uptrending 50-day moving average at $97.42 support my strong upside bias. Potential targets include $113.63 and $120.00. A change in the minor trend to down will weaken my outlook.
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