From a technical standpoint, crude oil’s focus is on a reaction into this key support zone early in the year with the bearish bias vulnerable while above 62.83
By :Michael Boutros, Sr. Technical Strategist
This is an excerpt from our full Crude Oil 2024 Outlook report, one of nine detailed reports about what to expect in the coming year. Click the banner at the bottom to download the full report.
WTI Weekly
Source: TradingView
Oil prices have been trading within the confines of a descending pitchfork extending off the 2022 highs. Price turned just ahead of the upper parallel this year with the pullback settling along the median-line into the close of 2023. Momentum indicators are a tad stretched here with weekly RSI holding multi-year lows- keep an eye on this heading into 2024 as we look to validate a possible exhaustion low in the first half of the year.
Initial support is being tested here at the 1.618% extension of the September decline at 68.78 with a critical support barrier eyed just lower at 62.83-64.60- a region defined by the 2019 high-week close, the 2023 swing lows, the 1.618% extension of the 2022 decline and the 50% retracement of the 2020 advance. Look for a more meaningful reaction in price there IF reached. Note that losses below this key threshold would threaten a much more significant sell-off with such a scenario exposing initial support objectives at 49.43 and 43.08.
The recent price decline has been trading within the confines of an embedded descending channel extending off the September highs – initial resistance is eyed with the upper parallel / 52-week moving average (currently ~78). Key resistance stands with the 2021 high-week close at 83.28 (note that this level converges on the pitchfork around the April / May timeframe). Ultimately, a breach / close above the 2023 high-week close at 90.79 would be needed to suggest a larger trend reversal is underway.
What are the major fundamental storylines for Crude Oil traders to watch next year? What about the outlook for global supply and demand? See our full guide to explore these themes and more!
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.