December West Texas Intermediate crude oil is in a position to close lower for the week as investors continue to wait for enough bullish news to drive the market out of its current trading range and into territory not traded since early April.
Ongoing tension in the Middle East boosted prices earlier in the week because of the threat of supply disruptions, however, Thursday’s price action indicates that those concerns may now be priced into the market.
Prices were also pressured by larger-than-expected product inventories in this week’s U.S. Energy Information Administration’s report.
Weekly Technical Analysis
(Click to enlarge)
The main tend is up according to the weekly swing chart. A trade through $53.11 will signal a resumption of the uptrend. This could lead to a test of the next main top at $55.02.
On the downside, the nearest main bottom is $46.59. A trade through this level will change the main trend to down.
On the upside, one price level seems to be preventing crude oil from taking off to the upside. On the other hand, one level is stopping the market from retreating into a series of retracement levels which could lead to a labored break.
The main range is $58.44 to $43.08. The market is currently trading inside its retracement zone at $50.76 to $52.57. This zone is controlling the longer-term direction of the market.
The short-term range is $46.59 to $53.11. Its retracement zone at $49.85…