Crude Oil Price Update – Supported by Worries About Global Energy Supply

U.S. West Texas Intermediate crude oil futures are edging lower early Thursday as traders assess the impact of the Federal Reserve’s fourth interest rate hike of the year and hawkish comments from Fed Chair Jerome Powell that drove the dollar higher and riskier assets lower.

The market was also supported by another decline in U.S. oil inventories as refineries picked up activity ahead of the winter heating season.

At 01:56 GMT, December crude oil futures are trading $89.37, down $0.63 or -0.70%. On Wednesday, the United States Oil Fund ETF (USO) settled at $74.05, up $0.93 or +1.27%.

On Wednesday, the U.S. Energy Information Administration reported that U.S. crude oil stocks fell about 3.1 million barrels on the week. Gasoline inventories fell by 1.3 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 427,000 barrels in the week to 106.80 million barrels, versus expectations for a 560,000-barrel drop.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $90.36 will signal a resumption of the uptrend. A move through $85.30 will change the main trend to down.

The new minor range is $85.30 to $90.36. Its pivot at $87.83 is support. Additional support is a price cluster at $85.49 to $85.30.

On the upside, the key target is the long-term retracement zone at $93.28 to $97.42.

Daily Swing Chart Technical Forecast

Trader reaction to $89.04 is likely to determine the direction of the December WTI futures contract on Thursday.

Bullish Scenario

A sustained move over $89.04 will indicate the presence of buyers. The first target is yesterday’s high at $90.36. Taking out this level will indicate the buying is getting stronger. If it creates enough upside momentum then look for a potential surge into the main top at $92.34, followed by the major 50% level at $93.28.

Bearish Scenario

A sustained move under $89.04 will signal the presence of sellers. This could trigger a break into the minor pivot at $87.83.

Look for a technical bounce on the first test of $87.83, but if it fails then look for the selling to possibly extend into the support cluster at $85.49 to $85.30.

Side Notes

Technically, the trend is up. Fundamentally, the market is getting support from the OPEC+ production cuts launched on November 1 and the upcoming European Union embargo against Russia on December 5.