The December micro WTI crude oil (CLZ25) futures are currently presenting a compelling selling opportunity, especially in the wake of continued price weaknesses.
An analysis of the daily bar chart for December crude oil futures indicates an ongoing price downtrend with bears enjoying a slight technical advantage as prices linger just above a crucial support level—set by August’s low.
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Crude Prices Pressured as Global Oil Supply Situation Improves
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Crude Prices Slip on the Outlook for Larger Global Oil Supplies
From a fundamental perspective, the growth of global crude oil demand is experiencing a slowdown, coinciding with a rise in crude oil supplies. This is further compounded by a recent increase in production quotas from OPEC+. The International Energy Agency has cautioned about an impending global crude oil supply glut.
A decline in December crude oil futures beneath solid technical support, specifically the August low of $60.57, would provide bears with enhanced leverage, creating a viable selling opportunity in the micro WTI crude oil futures market. Should this occur, the anticipated downside target would be around $53.00 or lower, while technical resistance—which should prompt the placement of a protective buy stop—is located at $64.00.
IMPORTANT NOTE: I am not a futures broker and manage only my own personal trading account. This article aims to highlight potential trading opportunities, but the decision to initiate any trades—and their size—rests solely with you. Any discussions of trades presented are hypothetical in nature.
The Commodity Futures Trading Commission (CFTC) has important advice regarding futures trading, which I wholeheartedly endorse:
Engaging in commodity futures and options trading is not suitable for everyone. This arena is characterized by volatility, complexity, and inherent risks. Prior to investing in any futures or options contracts, you must assess your financial experience, goals, and resources, considering how much you can afford to lose beyond your initial investment. You should thoroughly understand commodity futures and options contracts, your obligations related to them, and the risks involved by carefully reviewing your broker’s risk disclosure documents.
As of the date of publication, Jim Wyckoff holds no direct or indirect positions in any of the securities mentioned in this article. All information and data presented are offered solely for informational purposes. This article was originally published on Barchart.com
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