Crude Oil Price Update – Pivot at $58.68 Controlling Near-Term Direction

U.S. West Texas Intermediate crude oil futures are trading lower late in the session on Wednesday after government data showed an unexpected build in crude inventory in the United States. Also putting pressure on prices is uncertainty over whether the U.S. will impose new tariffs on Chinese imports on December 15.

At 18:46 GMT, February WTI crude oil futures are trading $58.51, down $0.63 or -1.07%.

According to the U.S. Energy Information Administration, U.S. stockpiles rose by 800,000 barrels for the week-ending December 6, the EIA said Wednesday. Analysts had been expecting a reduction of 2.8 million barrels, according to estimates from FactSet.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, the upside momentum has stalled. A trade through $59.74 will signal a resumption of the uptrend. A move through $54.75 will change the main trend to down. This is highly unlikely, but there is room to the downside for a near-term correction.

The minor range is $57.62 to $59.74. Its 50% level or pivot at $58.68 has been controlling the direction of the market all week.

The short-term range is $54.75 to $59.74. Its retracement zone at $57.25 to $56.66 is the nearest downside target. Since the main trend is down, buyers could come in on the first test of this area.

Daily Technical Forecast

Based on the early price action and the current price at $58.51, the direction of the February WTI crude oil market into the close is likely to be determined by trader reaction to the minor pivot at $58.68.

Bearish Scenario

A sustained move under $58.68 will indicate the presence of sellers. If this move creates enough downside momentum then look for a sharp break into the minor bottom at $57.62, followed closely by the short-term 50% level at $57.25. Watch for buyers to re-emerge on this move.

Bullish Scenario

A sustained move over $58.68 will signal the presence of buyers. This could trigger a surge into the minor top at $59.74, followed closely by the September 16 main top at $60.37.