WTI Crude Oil Futures (December): A Round Top Pattern Found

Oil prices slumped at the end of October due to the second wave of coronavirus. WTI Crude Oil futures (December) lost 14% from the top of October

Energy 2

Oil prices slumped at the end of October due to the second wave of coronavirus. WTI Crude Oil futures (December) lost 14% from the top of October. More and more European countries announced the lockdown plans to  limit the new inflections.

JPMorgan lowered the 4Q average Brent forecast to $39/bbl from $41/bbl as renewed lockdowns in Europe further weigh on demand. The bank cut the oil demand estimates by 890K barrels per day for November and 1.08M barrels per day for December.

On the other hand, OPEC+ might delay its January output increase for extra three months, reported Bloomberg. Russia President Vladimir Putin also said he was open to a delay for the oil cut plan.

From a technical point of View, WTI Crude Oil Futures (January) broke below  the neckline and confirmed a round top pattern. Currently, it is still trading below both declining 20-day and 50-day moving averages. The relative strength index is also capped by a declining trend line.

Bearish readers could set the resistance level at $39.80, while support level would be located at $33.50 and $30.40 respectively.

Source: GAIN Capital, TradingView

More from Crude Oil

Disclaimer: 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 and commodity futures, 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 GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account