Crude Oil Price Update – Pullback into $43.30 to $42.57 Likely to Attract New Buyers

U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday after a surprise build in oil inventories in the United States and as OPEC and its allies left markets in limbo by delaying a formal meeting to decide whether to increase output in January.

Helping to offset the potentially negative events was the news that Britain has become the first country in the world to approve a vaccine for use against the coronavirus and that it will be rolled out from early next week.

At 08:14 GMT, January WTI crude oil is trading $44.44, down $0.11 or -0.25%.

In other news, late Tuesday industry data from the American Petroleum Institute showed U.S. crude inventories rose by 4.1 million barrels last week, compared with analysts’ expectations in a Reuter poll for a draw of 2.4 million barrels.

Daily January WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $46.26 will reaffirm the uptrend. The main trend will change to down on a trade through $40.33.

The minor trend is also up. A trade through $41.26 will change the minor trend to down. This will also signal a shift in momentum.

The minor range is $40.33 to $46.26. Its 50% level at $43.30 is a potential downside target.

The main range is $34.04 to $46.26. Its retracement zone at $40.15 to $38.71 is the best support area.

Daily Swing Chart Technical Forecast

There doesn’t seem to be enough bullish news to support the market at current price levels or to encourage investors to chase prices higher. So we have concluded that prices have to pull back into the pair of 50% levels at $43.30 and $42.57 in order to attract new buyers.

If there is a move to the upside then look for it to run into resistance at $45.09. Counter-trend traders could come in on a test of this level. They are bearish traders trying to set up a minor secondary lower top.

The trend is up but your choice is to play for a pullback into $43.30 to $42.57, or a breakout over $46.43.

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

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.