Crude Oil Price Update – Early Strength Over $85.26, Weakness Under $84.23

U.S. West Texas Intermediate crude oil futures inched higher on Friday after recovering from an earlier setback. The catalyst behind the late session short-covering rally was concern over a supply disruption after a report of a spill at Iraq’s Basra terminal.

Despite the minimal gain, the market still closed lower for the week on fears that aggressive rate hikes by the major central banks will curtail global economic growth and demand for fuel.

On Friday, November WTI crude oil settled at $84.76, up $0.11 or +0.13%. This was up from an intraday low of $83.86. The United States Oil Fund ETF (USO) finished at $69.90, up $0.14 or +0.20%.

According to Reuters, oil exports from Iraq’s Basra terminal are being gradually resumed after they were halted last night due to a spillage, which has been contained, Basra Oil Company said.

The spill at the port, which has four loading platforms and can export up to 1.8 million barrels per day, drove up prices on the prospect of lower global crude supply.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $89.63 will change the main trend to up. A move through $80.89 will signal a resumption of the downtrend.

The short-term range is $80.89 to $89.63. The market settled inside its retracement zone at $85.26 to $84.23.

The minor range is $89.63 to $83.86. Its pivot at $86.75 is the nearest resistance.

The main range is $96.82 to $80.89. Its retracement zone at $88.86 to $90.73 is resistance. This zone stopped the rally at $89.63 on September 14.

Short-Term Outlook

Trader reaction to the short-term Fibonacci level at $84.23 is likely to determine the direction of the November WTI crude oil futures market early Monday.

Bullish Scenario

A sustained move over $84.23 will indicate the presence of buyers. Overtaking the short-term 50% level at $85.26 will indicate the buying is getting stronger. If this move creates enough upside momentum, then look for a surge into the pivot at $86.75.

Bearish Scenario

A sustained move under $84.23 will signal the presence of sellers. This could trigger the start of an acceleration to the downside with the main bottom at $80.89 the next target.