A week or so ago, the price of crude oil moved above a key swing ceiling between $82.43 and $83.44 (see yellow area and read numbered circles on the chart above). The price moved above that ceiling on Wednesday of last week, closing at $84.40.
- The next day (on Thursday) a new high was made going back to November 2022 at $84.89, but momentum could not be sustained, and the price moved back within the swing area.
- On Friday last week, the high price reached $83.81. The low price was at $82.23. Each of those levels extended outside of the swing area ceiling but the price closed within the high/low swing area.
- On Monday of this week, the price moved lower and closed below the swing area. Buyer's started to turn to sellers.
- Momentum increased to the downside on Tuesday and Wednesday with the low price on Wednesday reaching $79.05 just above the $79 target area.
- On Thursday the low price reached $78.95, this time just below the $79 level before bouncing higher.
- Finally, today the low price reached $79.02, once again just above the $79 level.
So overall, the buyers had their shot last week with the move above the high of the swing area and $83.44. They failed. This week, the sellers had their shot at breaking below the $79 level, but they are failing as well.
So with support holding and resisting's failing, for traders, we've defined a range.
- Support at $79 going into next week.
- Resistance is back between $82.43 and $83.44
With a price currently at $80.80, pick your poison.
Fundamentally, the main drivers are things like
- Saudi reducing supply
- Fairly strong demand in the US, with the potential for slowing if the Fed continues to tighten and the forever expected slowdown occurs in the 2nd half
- Concerns about slow growth in China as a struggle with their real estate woes and lack of balance from the Covid reopening
For the week the price is down $2.33 or -2.81%, but that came after 7 consecutive weeks that saw the price move up 26.61% from the low to the high of that seven-week trading range
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