Technical analysis of WTI

The attached chart shows WTI crude oil trading within a descending price channel, which is clearly visible on shorter timeframes. The attached chart uses a 2-hour timeframe. We will consider this price channel a potential continuation pattern (flag), provided that prices break above the nearby resistance zone at $104.3. The significance of this resistance level is reinforced by the following factors:

  1. The area around $104.3 has acted as a resistance zone, with prices having attempted to break above it on two previous occasions.
  2. This price channel has formed following an uptrend, leading us to consider it a potential continuation channel for the preceding trend.
  3. The support zone that could invalidate the positive implications of this price channel is the previous low near $100.8.

Accordingly, we expect a potential upward move in crude oil prices, provided that WTI breaks above the resistance level of $104.3 per barrel.

WTI, Time frame: 2 HOUR, Tools: SMA 100WTI, Time frame: 2 HOUR, Tools: SMA 100

Fundamental analysis of WTI

As tensions persist, concerns over supply disruptions and continued drawdowns from strategic reserves remain the key drivers of oil price movements. The following are the main factors that could influence prices:

  1. Data from the American Petroleum Institute (API) showed that US oil inventories declined by more than two million barrels in the previous week.
  2. Supply risks in the Middle East remain a concern, while diplomatic efforts to prevent the conflict from continuing are being closely monitored.
  3. The OPEC+ alliance is expected to leave its December production targets unchanged at its upcoming meeting on Sunday.

Ultimately, will WTI manage to break above the $104.3 resistance level, or will diplomatic efforts succeed in bringing the current tensions to a peaceful resolution?