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Crude Oil Price Update – Trader Reaction to $69.72 Minor Pivot Will Determine Near-Term Direction

·2-min read

U.S. West Texas Intermediate crude oil futures are edging lower late Friday, while trading inside Wednesday’s wide range for a second session, indicating investor indecision and impending volatility. Nonetheless, the market remained in a position to post a weekly gain.

The catalyst behind the selling pressure is renewed supply as energy companies in the U.S. Gulf of Mexico started production after back-to-back hurricanes in the region shut output.

At 19:43 GMT, December WTI crude oil futures are trading $71.42, down $0.49 or -0.68%.

Gulf Coast crude oil exports are flowing again after hurricanes Nicholas and Ida took out 26 million barrels of offshore production. Restarts continued with about 28% of U.S. Gulf of Mexico crude output offline, Reuters reported on Thursday.

Daily December WTI Crude Oil
Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the July 6 main top at $72.61 will reaffirm the uptrend. A move through $67.04 will change the main trend to down.

The minor range is $67.04 to $72.39. Its 50% level at $69.72 is the next downside target.

The short-term range is $61.11 to $72.39. If the main trend changes to down then its retracement zone at $66.75 to $65.42 will become the primary downside target area. Look for a technical bounce on the first test of this zone.

Short-Term Outlook

The direction of the December WTI crude oil market into the close on Friday will be determined by trader reaction to $71.21.

Bullish Scenario

A sustained move over $71.21 will indicate the presence of buyers. If this move creates enough upside momentum into the close then look for a possible test of $72.39 – $72.61.

Bearish Scenario

A sustained move under $71.21 into the close will signal the presence of sellers. This will likely lead to a test of the nearest pivot at $69.72 on Monday.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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