Oil prices continue to trade with an upside bias, with front-month WTI futures having now recovered roughly $6.0 (nearly 10%) to the $68.00s from Thursday’s lows in the $62.00s. On the day, that translates to gains of about $1.0 or 1.5%. Oil prices tumbled on Thursday in the immediate aftermath of OPEC+’s surprise decision to press ahead with 400K barrel per day output hike in January, going against analyst expectations for the group to halt output amid Omicron-related uncertainty. But market participants deemed the knee-jerk reaction to be excessive. Some analysts framed OPEC+’s decision as a “vote of confidence in the near-term demand outlook” and interpreted the decision as OPEC+ signaling that it does not expect Omicron to have a lasting impact on demand

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

However, 61.8% Fibonacci retracement level of March-October upside, around $68.00, probes the oil buyers before directing them to the key 200-DMA hurdle of $69.85.

Also acting as an upside filter is the $70.00 threshold and 50% Fibo. near $71.20.

Alternatively, a daily closing below the multiday-old support line near $64.75 will redirect the WTI bears to attack August month’s low of $61.73.

Following that, the $60.00 round figure may probe the commodity sellers before directing them to March’s low of $57.27.

Bears In Strong Control of WTI Below $75.30

Dec 04 2021