As we sit on pins and needles, awaiting potential scenarios from the Organization of Petroleum Exporting Countries in regard to production cuts for next year, we must keep an eye on major technical levels during these choppy, light volume, holiday shortened trading days, with some indication on momentum and flow. As of 12:20pm EST, Texas Light Sweet for January delivery is up $0.28 at $56.70, HO is unchanged, and RBOB is up $0.0133 at $1.7511. WTI has rallied 4% over the past six trading days from last Tuesday’s lows of $54.81 to today’s $57.22 high. Technical support at the $55.24 level (1st trading day of the year high), held for four of those trading sessions opening up the chance to get back to most recent highs of $57.92. Settling two days above the $55.92 12day EMA (Exponential Moving Average) and the six month upward trend channel-top level of $56.08, confirms near-term support and slight pullback short covering. Intraday today, the $56.71 failed bull-flag-pattern-bottom from two weeks ago, should contain initial strength. Whilst, a breakout and settlement above $57.57 indicates a rally to the $60.50 long-term channel-top in the next week or so. Breaking and settling below the $56.08 channel-top support and falling back into the six month upward trend channel indicates a good near-term high and should head back towards last week’s low and 26 day EMA of $54.78.
In the meantime, we await APIs today and DOEs tomorrow for any directional indications in regard to supply and demand. Reuters and Bloomberg DOE estimates below:
CRUDE -2.2 MMBBL -1.2 MMBBL
GASOLINE +0.9 MMBBL +0.5 MMBBL
DISTILLATES -1.8 MMBBL -1.6 MMBBL