December West Texas Intermediate crude oil futures are surging for a second session as supply issues move to the forefront, more than offsetting some of the lingering demand concerns over the pandemic.
Bullish traders are still reacting to President Trump’s return to the White House after being hospitalized over the weekend for COVID-19, but the main price drivers are supply disruptions in Norway due to a strike at a major facility and a new hurricane in the Gulf of Mexico that threatens production.
At 13:44 GMT, December WTI crude oil futures are trading $40.93, up $1.43 or +3.62%.
The market is also being underpinned by hopes for a bipartisan U.S. economic relief package as House Speaker Nancy Pelosi and Treasury Steven Mnuchin are scheduled to meet again on Tuesday, in a concerted effort to reach a compromise on legislation.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The main trend will change to up on a trade through $42.02. A move through $36.93 will signal a resumption of the downtrend.
The minor range is $42.02 to $36.93. The market is trading on the strong side of its retracement zone at $40.08 to $39.48, making this area support.
The short-term range is $44.33 to $36.93. Its retracement zone at $40.63 to $41.50 is currently being tested. Trader reaction to this zone will determine the near-term direction of the market.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at $40.63.
A sustained move over $40.63 will indicate the presence of buyers. This could trigger a surge into the Fibonacci level at $41.50, followed closely by the main top at $42.02. Taking out this level will change the main trend to up.
A sustained move under $40.63 will signal the return of sellers. This could trigger a break into the minor Fibonacci level at $40.08, followed by the minor 50% level at $39.48. The latter is a potential trigger point for an acceleration to the downside.
For a look at all of today’s economic events, check out our economic calendar.