U.S. West Texas Intermediate crude oil futures are trading lower early Thursday and in an extremely tight range after an industry report showed a huge inventory build that more than offset the hope of increased production cuts by OPEC and its allies at its December meeting. Losses may have been limited by a weaker U.S. Dollar, which tends to drive up foreign demand for dollar-denominated crude oil.
At 04:06 GMT, December WTI crude oil is trading $53.06, down $0.39 or -0.73%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending slightly higher. A trade through $54.99 will change the main trend to up. A move through $50.89 will signal a resumption of the downtrend.
The minor trend is up. This is helping to generate the slight upside bias. A trade through $51.40 will change the minor trend to down. This will shift momentum to down.
The short-term range is $50.89 to $54.99. Its retracement zone at $52.94 to $52.46 is providing support.
The minor range is $54.99 to $52.46. Its 50% level or pivot at $53.73 is providing resistance.
The intermediate range is $59.11 to $50.89. Its retracement zone at $55.00 to $55.97 is the nearest resistance.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the December WTI crude oil futures contract on Thursday will likely be determined by trader reaction to the short-term 50% level at $52.94.
A sustained move over $52.94 will indicate the presence of buyers. If this generates enough upside momentum then look for the rally to possibly extend into the pivot at $53.73. This price is a potential trigger point for an acceleration to the upside with $54.99 to $55.00 the next likely target.
A sustained move under $52.94 will signal the presence of sellers. The first downside target is $52.46.
If $52.46 fails, the market could break sharply into $51.40. Taking out this level could lead to an eventual test of the main bottoms at $50.89 and $50.33.
This article was originally posted on FX Empire
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