WTI Crude Oil: general analysis

Current trend

This week, oil prices are recovering ahead of the OPEC summit, planned on December 5–6 in Vienna.

In November, OPEC countries reduced production by 110K barrels per day. In addition, the Minister of Energy of Iraq Thamir Ghadhban said that the representatives of the cartel are ready to discuss a reduction in production by 400K barrels per day.

Additional support for the instrument was provided by positive data on industrial production in China, which were published over the weekend. Chinese Manufacturing PMI for the first time since April 2019, exceeded the key level of 50 basis points. China is the largest consumer of hydrocarbons in the world, so the restoration of its industrial sector will provide quotes with moderate short-term support. However, a drop in business activity in the US manufacturing sector is still limiting the pace of oil market recovery.

Today at 23:30 (GMT+2), API Weekly Crude Oil Stock will be released. According to a Bloomberg poll, the figure fell by 1.5 million barrels over the past week.

Support and resistance

On the 4-hour chart, a downtrend correction is observed. The instrument consolidates at the bottom of Bollinger bands. The indicator is directed downwards, and the price range expanded, indicating a further decline. MACD is in the negative zone, keeping a strong sell signal. Stochastic approaches the oversold zone, a signal to enter the market is not formed.

Resistance levels: 56.78, 57.39, 58.01, 58.84.

Support levels: 55.79, 55.03, 54.50, 53.95.

Trading tips

Long positions may be opened above 57.00 with the target at 58.60 and stop loss 56.50.

Short positions may be opened below 55.45 with the target at 54.25 and stop loss 56.10.

Implementation period: 1–3 days.

Scenario

  • Timeframe

    Intraday

  • Recommendation

    BUY STOP

  • Entry Point

    57.05

  • Take Profit

    58.60

  • Stop Loss

    56.50

  • Key Levels

    53.95, 54.50, 55.03, 55.79, 56.78, 57.39, 58.01, 58.84

Alternative scenario

  • Timeframe

    Intraday

  • Recommendation

    SELL STOP

  • Entry Point

    55.40

  • Take Profit

    54.25

  • Stop Loss

    56.10

  • Key Levels

    53.95, 54.50, 55.03, 55.79, 56.78, 57.39, 58.01, 58.84