Crude Oil Price Update – Weak Dollar, Easing of China COVID Curbs Underpin; OPEC+ Uncertainty Caps Gains

U.S. West Texas Intermediate crude oil futures are up late in the session on Thursday but off its intraday high. Prices have been supported throughout the session by a weaker U.S. Dollar and hopes for improved fuel demand in China after COVID-19 curbs were eased in two major cities.

At 21:25 GMT, January WTI crude oil futures are trading $81.38, up $0.83 or 1.03%. The United States Oil Fund ETF (USO) settled at $70.44, up $0.21 or +0.30%.

The prospect of a lower price cap on Russian oil is also lending support, analysts said. European Union governments tentatively agreed on Thursday on a $60 cap on Russian sea-borne oil, an EU diplomat said.

The wildcard is OPEC+, which holds a virtual meeting on Dec. 4 to discuss policy. Earlier in the week, there was a rumor that the group would announce another production cut. It drove prices sharply higher. However, that story was put to bed when officials decided to hold a Zoom meeting rather than an in person discussion.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $92.53 will change the main trend to up. A move through $73.60 will signal a resumption of the downtrend.

The minor trend is up. It changed to up when buyers took out $82.36. This shifted momentum to the upside.

On the downside, the nearest support is a long-term Fibonacci level at $78.72

On the upside, resistance is a 50% level at $83.07. This level stopped the rally on Thursday.

Daily Swing Chart Technical Forecast

Trader reaction to $83.07 is likely to set the early tone on Friday.

A sustained move under this level will signal the presence of sellers with $78.72 the nearest target.

A sustained move over $83.07 will indicate the presence of buyers. This could trigger a quick surge into a pivot at $84.43. This is a potential trigger point for an acceleration to the upside with $91.12 the next major target.