Current dynamics

WTI Crude Oil quotes remain within a long-term downward channel, but a sideways range of 67.19–71.88 (Murray level [3/8]–[6/8]) has formed within it, within which the price has been trading for the second month in a row.

Last week, the instrument turned around from its lower border and rose to the 71.80 region amid the aggravation of the geopolitical situation due to the US authorities’ permission to use American weapons to strike Russia, which could also damage oil infrastructure. However, on Monday, quotes sharply corrected downwards amid promises by US President-elect Donald Trump to impose a 25.0% duty on all goods imported from Mexico and Canada, as well as an additional 10.0% on products manufactured in China. While the tariffs aimed at Canadian trade are unlikely to affect oil supplies, the volumes of which are difficult to replace, the increased pressure on the Chinese economy raises significant concerns about a further drop in demand for “black gold”. Additional pressure on the market is also being exerted by the ceasefire that began today between Israel and the Lebanese paramilitary organization Hezbollah, which is reducing tensions in the Middle East and reducing the risks of supply disruptions from the region.

Against the backdrop of these reports, WTI Crude Oil quotes reached 68.75 (Murray level [4/8]), where they stabilized. Investors remain cautious ahead of the meeting of OPEC participants, whose reaction to the latest events could have a significant impact on prices. It is expected that producers may once again postpone the start date of increasing production (initially planned for October), this time to February. The implementation of these forecasts, as well as any new hints of the cartel curbing production volumes, could become a driver of growth for the trading instrument.

Support and resistance levels

Technically, the price is testing the 68.75 mark (Murray level [4/8]), a breakout of which downwards will allow quotes to continue their decline to targets of 65.62 (Murray level [2/8]), 62.50 (Murray level [0/8]). If quotes consolidate above the 71.88 level (Murray level [7/8]), the upward dynamics may strengthen to targets of 75.00 (Murray level [8/8]) and 78.12 (Murray level [ 2/8]).

Technical indicators do not give a single signal: Bollinger Bands are horizontal, MACD is stable in the negative zone, and Stochastic is directed downwards.

Resistance levels: 71.88, 75.00, 78.12.

Support levels: 68.75, 65.62, 62.50.

Trading scenarios

Short positions should be opened below the level of 68.75 with targets of 65.62, 62.50 and stop-loss of 70.70. Implementation period: 5-7 days.

Long positions can be opened above 71.88 with targets at 75.00, 78.12 and stop loss at 70.00.