Crude Oil Price Update – Best Case Scenario for Bulls Targets $40.72
U.S. West Texas Intermediate crude oil futures rose more than 2% on Tuesday, supported by hurricane supply disruptions in the United States, but demand concerns loomed as energy forecasters predicted a slower-than-expected recovery from the pandemic.
Prices were also supported by a drop in U.S. crude oil stockpiles as reported by industry group, the American Petroleum Institute (API), but gains were limited by a rise in gasoline inventories.
On Tuesday, December WTI crude oil futures settled at $38.93, up $0.94 or +2.47%.
With Hurricane Sally expected to make landfall on the U.S. Gulf Coast, more than a quarter of U.S. offshore oil and gas production was shut and key exporting ports were closed as the storm’s trajectory shifted east toward western Alabama, sparing some Gulf Coast refineries from high winds.
The API reported that crude inventories fell by 9.5 million barrels in the week to September 11 to about 494.6 million barrels, compared with analysts’ expectations for a build of 1.3 million barrels. Gasoline stocks rose by 3.8 million barrels, compared with analysts’ expectations in a Reuters poll for a draw of 160,000.
Earlier in the session, the International Energy Agency (IEA) trimmed its 2020 outlook by 200,000 barrels per day (bpd) to 91.7 million bpd, citing caution about the pace of economic recovery.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $44.33 will change the main trend to up. This is highly unlikely by there is room for a normal 50% to 61.8% retracement.
A trade through $39.22 will confirm the September 9 closing price reversal bottom. This will also shift momentum to the upside. A trade through the bottom will negate the potentially bullish chart pattern, and signal a resumption of the downtrend.
The minor range is $37.11 to $39.22. Its 50% level or pivot at $38.15 is support. A successful breakout above this level may have triggered Tuesday’s short-covering rally.
The short-term range is $44.33 to $37.11. If the upside momentum continues then we could see a move into its retracement zone at $40.72 to $41.47.
On the downside, the major support zone is $34.82 to $32.58.
Daily Swing Chart Technical Forecast
Tuesday’s close puts the December WTI crude oil futures contract in a position to take out $39.22. This will confirm last week’s closing price reversal bottom. This could trigger the start of a 2 to 3 day rally with the 50% level at $40.72 the minimum upside target.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
Litecoin, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – September 16th, 2020
Gold Price Prediction – Prices Edge Higher on Higher Import Prices
Geberit Announces Share Buyback Worth 500 Million Swiss francs; Target Price CHF 625 in Best Case
USD/CAD Daily Forecast – Another Attempt To Get Above 1.3200
Natural Gas Price Forecast – Natural Gas Bounce from 50 Day EMA
