oil

WTI Crude Oil Rallies, Tests The $54.00 Level

Posted Monday, December 3, 2018 by
Shain Vernier • 1 min read

December has started with a bang for the U.S. indices and WTI crude oil. Breaking news from the G20 has sent both markets higher, with traders bidding January WTI crude north by more than $1.00 per barrel. Reported OPEC and Russian production cuts have momentarily put a stop to the downtrend in WTI, with an intermediate-term bottom setting up in the vicinity of $50.00.

In addition to the production cuts, Qatar announced that it is leaving OPEC to focus on the natural gas industry. While this is not a monumental announcement, it is bringing fresh uncertainty to the global crude oil markets. The result has been a GAP up to begin December’s energy trade.

January WTI Crude Oil Futures

In a similar vein as the U.S. indices, January WTI futures opened today’s trade GAP up from last Friday’s close. Price rallied more than $1.50 on Sunday afternoon’s electronic open. The buying was intense as traders took long positions in response to the OPEC and Qatar news items.

January WTI Crude Oil Futures (CL), Daily Chart
January WTI Crude Oil Futures (CL), Daily Chart

Here are a few levels to watch as the weekly trade gets underway:

  • Resistance(1): 38% Current Wave Retracement, $52.75
  • Support(1): Psyche Level, $50.00

Overview: For the time being, the technical roadmap for January WTI is straightforward. The downtrend remains valid, with the $50.00 level setting up to be the premier catalyst for two-way action in this market.

While today’s bullish breakout is a good sign for those holding longs, it may be short-lived. Look for the GAP area between  $50.72 and $52.45 to be filled in before the weekly inventories cycle kicks off Tuesday afternoon.

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About the author

Shain Vernier is our US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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