Oil prices are down sharply on the final trading day of the week amid fears that European lockdowns will hit demand. Front-month futures for the American benchmark for sweet light crude oil, West Texas Intermediary or WTI, dipped to fresh six-week lows under $76.00 at one point earlier in the session. WTI has since recovered back to the north of the $76.00 level, but that means it is still down by over $2.50 or more than 3.0% on the day. On the week, the losses are closer to $4.50 (over 5.0%). Elsewhere, crude oil prices have also this week been weighed amid concerns of an imminent crude oil reserve release from major oil-consuming nations. The US, in response to OPEC+’s refusal to increase output at a faster rate earlier in the month, has spent the last few days petitioning major Asian oil importers to release reserves. Authorities in China have already said they plan to do so

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

While July’s top put a carpet under the commodity’s downturn and MACD signals helped buyers to return, strong resistance levels do challenge the quote to defy the four-week downtrend.

Among the key hurdles, the first one comprises the 100-HMA and a descending trend line from November 09, near $78.90. Following that, a convergence of the 200-HMA and 50% Fibonacci retracement (Fibo.) of November 09-18 fall, close to the $80.00 threshold, will be a tough nut to crack for the WTI bulls.

In a case where the energy benchmark rises past $80.00, the weekly top near $80.70 and November 11 peak of $81.13 will be in focus.

Alternatively, pullback moves need to conquer the July month’s top of $76.40 to convince WTI crude oil sellers and aim for the 100-DMA level near $73.90.

Overall, WTI bears seem to have run out of steam but the bulls aren’t fully ready.

WTI Looking for a Correction or Reversal ?

Nov 22 2021