U.S. West Texas Intermediate crude oil futures closed lower on Thursday, reversing earlier gains in a volatile session after a report that Saudi Arabia’s oil output will soon surpass 10 million barrels per day for the first time since the outset of the COVID-19 pandemic.
On Thursday, December WTI crude oil futures settled at $78.81, down $2.05 or -2.54%.
Saudi Arabia has already dismissed calls for speedier oil supply increases from OPEC+. But the Al Arabiya TV report said the Saudis will reach 10 million bpd in December.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The main trend was reaffirmed on Thursday when sellers took out the October 13 main bottom at $78.78. A move through $84.88 will change the main trend to up.
The minor trend is also down. A trade through $83.42 will change the minor trend to up and shift momentum to the upside.
On the upside, resistance comes in at $80.04, followed by $81.83.
On the downside, the first support is a 50% level at $79.12. This is a potential trigger point for an acceleration to the downside with $76.91 the next support target. This is followed by a major retracement zone at $76.23 to $74.06.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil futures market early Friday is likely to be determined by trader reaction to $79.12.
A sustained move over $79.12 will indicate the presence of buyers. The first upside target is $80.04. Overtaking this level could trigger a surge into $81.83. Since the main trend is down, sellers are likely to come in on a test of this level.
A sustained move under $79.12 will signal the presence of sellers. The first downside target is yesterday’s low at $78.25. This price is a potential trigger point for an acceleration to the downside with targets coming in at $76.91, followed by $74.23 to $74.06. Aggressive counter-trend buyers could come in on a test of this retracement zone.