U.S. West Texas Intermediate crude oil futures are down nearly 5% on Friday after President Donald Trump tested positive for COVID-19 and negotiators failed to agree on a U.S. fiscal stimulus package designed to save the economy by speeding along the recovery. Meanwhile new data from OPEC showed that rising global output threatens to destroy the weak price recovery.
At 13:25 GMT, December WTI crude oil is trading $37.05, down $1.96 or -5.02%.
Pressure was generated early in the session after Trump tweeted about his positive test and House Speaker Nancy Pelosi and the White House failed to find common ground over new stimulus measures. Meanwhile, OPEC said that crude supplies rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the previous main bottom at $37.11. A trade through $42.02 will change the main trend to up.
Daily Swing Chart Technical Forecast
A sustained move under $37.11 will indicate the selling pressure is intensifying. This could create the downside momentum needed to challenge the June 12 bottom at $35.72.
If $35.72 fails then look for the selling to extend into the main 50% level at $34.82. A test of this level will signal that the market has retraced 50% of the entire rally from the April 22 bottom at $25.31.
Testing $25.31 will indicate that traders are giving up on trying to predict when demand will return and that the OPEC+ production cuts are the only factor holding this market together.
For a look at all of today’s economic events, check out our economic calendar.