The direction of the January WTI crude oil market is likely to be determined by trader reaction to $45.30.
U.S. West Texas Intermediate crude oil futures are under pressure early Tuesday, following through to the downside after yesterday’s weak session. The selling was driven as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe.
At 06:26 GMT, January WTI crude oil futures are trading $45.51, down $0.25 or -0.55%.
“For the moment, the market is happy to look past these issues as the vaccine rollout begins; however the economic headwinds are building in the short-term,” ANZ Research said in a note.
Later today at 21:30 GMT, traders will get the opportunity to react to the latest inventory data from the American Petroleum Institute (API). It is expected to show that U.S. crude stocks fell the week-ending December 4.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $46.68 will reaffirm the uptrend. The main trend changes to down on a move through $43.92.
On the upside, the resistance is a long-term Fibonacci level at $46.43.
The first minor range is $43.92 to $46.68. Its 50% level at $45.30 is support.
The short-term range is $40.33 to $46.68. Its 50% level at $43.51 is another potential downside target.