In this WTI oil forecast, FORTRADER’s analysts provide a technical analysis of the CLx (January 2016) futures contract for the current trading day, along with actionable trade recommendations and precise support/resistance levels. All signals are derived from an in-house strategy developed by a practicing trader; however, they are strictly for informational and educational purposes only.
Previous Trading Day Summary
On Friday, December 4, WTI crude oil futures (CLx, January 2016) closed with the following intraday metrics:
- Highest price (H) = $42.00 (+0.22*)
- Lowest price (L) = $40.07 (−0.47*)
- Closing price (C) = $39.97 (−1.11*)
- Official close for CL (December 2015) = $40.39 (−0.42*)
(* — change vs. prior trading day, USD per barrel)
The session for the January 2016 WTI futures contract exhibited pronounced intraday volatility.
On Friday, OPEC held its 168th ministerial meeting in Vienna — a highly anticipated event across global energy and financial markets. Traders expected decisive action amid persistently low crude prices. Pre-meeting statements and leaks had fueled speculation about potential output cuts. However, the outcome left market participants in a state of “extreme uncertainty.” The reported figure of 31.5 million barrels per day was initially interpreted as an expansion of existing production quotas.
Subsequently, OPEC officials clarified that no formal decision on quota limits had been made. The 31.5 MMBbl/d figure reflected actual current production levels — boosted by Indonesia’s re-entry into the cartel. The final statement noted that Iran’s return to the crude export market would exert significant influence, but the timing and location of demand-supply equilibrium remain unpredictable. To refine its policy response, OPEC agreed to reassess market conditions at its next meeting. Notably, for the first time in many years, OPEC did not discuss production quotas. This implies the cartel prioritized preserving market share over price stabilization — even as oil prices hovered near their lowest levels since 2009. Two implications stand out: First, OPEC effectively delegated responsibility for reducing supply overhang to non-OPEC producers. Second, the rivalry between Iran and Saudi Arabia has become increasingly explicit.
Baker Hughes data showed a weekly decline of 7 active drilling rigs, bringing the total to 737 — down 1,183 year-on-year. Oil-directed rigs fell by 10 to 545, while gas-directed rigs rose by 3 to 192.
U.S. nonfarm payrolls increased by 211,000 jobs.
The U.S. unemployment rate for November stood at 5.0%.
U.S. labor market data came in robustly. Employment remains a top priority indicator for the Federal Open Market Committee (FOMC) when assessing interest rate policy.
Tensions between Turkey and Russia continue escalating. Russia has imposed economic sanctions on Turkey, and both sides have exchanged sharp public statements regarding the conflict.
Russia continues implementing restrictive measures against Turkey, while Turkey seeks alternative natural gas suppliers and introduces domestic economic support measures.
Both countries have issued increasingly harsh and contradictory accusations. Recall that Turkey is a NATO member; alliance members have activated a support program under current circumstances — including reinforcing Turkey’s air defense systems, deploying additional allied military personnel, and enhancing surveillance and early-warning capabilities.
Over the weekend, Iran and Turkey exchanged strong statements concerning Turkey’s military base inside Iran and planned troop rotations.
Recall that Turkey controls shipping through the Bosporus Strait and serves as a critical transit hub for crude oil and petroleum products.
The Turkish Navy conducted large-scale drills in the strait. Over the weekend, an incident occurred involving a Russian naval vessel. Turkey voiced strong concerns about possible repeat incidents — referencing the earlier downing of a Russian jet — but now involving warships.
News Flow Impacting Oil Prices on December 7, 2015
Today’s news flow for the oil market is largely neutral. Incoming data and headlines will be assessed within the context of current demand outlooks and forward expectations. FORTRADER analysts highlight a limited release schedule from the U.S., EU, and the UK. China’s trade balance data and a broad set of Japanese economic indicators will be published. Throughout the day, officials from the Eurogroup, the Bank of England, and the FOMC will deliver speeches.
WTI Support, Resistance & Pivot Point Levels for December 7, 2015
Resistance Levels (January 2016):
- R3 = 43.93
- R2 = 42.96
- R1 = 41.55
Pivot Point (PP):
- PP = 40.57
Support Levels:
- S1 = 39.15
- S2 = 38.18
- S3 = 36.77
Open Position Summary as of December 4, 2015
No long or short positions in WTI oil were opened during the previous trading session.
WTI Trading Plan for December 7, 2015
Today’s Strategy
Trading WTI futures today requires consideration of the following factors:
- Strong intraday price dynamics and volatility on the prior session have resulted in mixed pivot-based support/resistance calculations — increasing risks of both strong breakouts and range-bound consolidation, as well as sharp intraday corrections.
- Ongoing developments in Syria and the broader region: News and rumors may trigger elevated volatility across markets.
- Escalating crisis between Turkey and Russia: Statements, events, and diplomatic developments carry direct volatility risk for oil prices.
- Indirect influence of the U.S. Dollar Index: Also consider the upcoming FOMC meeting — potential indirect impact on crude oil markets.
Price Status:
- Weekly: In oversold territory; current condition suggests risk of exhaustion in downward momentum and limited further downside impulse.
- Daily: In a selling zone; upside continuation remains constrained.
- Intraday: Mixed condition — risk of correction reversing extreme price moves.
The range 40.55–40.80 is viewed as a key local reversal signal and initial resistance level.
Long Positions:
- A test and close above 40.70–40.80 on the M30 timeframe confirms rising upside risk and potential pause in the downtrend.
- Initial targets: 41.15–41.25, then extension toward 41.45–41.55.
- A test and close above 41.60–41.65 on M30 confirms continuation upward.
- Target zone: 42.90–43.00.
- Watch for local resistance at 41.95–42.05 and 42.65–42.75.
- A test and close above 43.05–43.15 on M30 confirms further upside momentum.
- Target zone: 43.80–43.90.
- Monitor 43.25–43.35 as a potential local resistance — it acts as both a corrective UP-trend barrier and a reversal-level candidate; a close above increases acceleration risk.
- If price rises strongly, the daily high may form at 43.95–44.05 — a major resistance zone; a close above carries acceleration risk.
Short Positions:
- The 39.90–40.10 range previously served as support for the corrective UP-trend and as a psychological floor; a test and close below shifts its role to resistance.
- A test and close below 40.40–40.50 signals renewed downside risk and likely end to the corrective rally.
- Initial target: 39.65–39.55, then extension to 39.05–39.15.
- Watch for local support at 39.35–39.45.
- A test and close below 39.00–38.95 triggers further downside risk.
- Target: 39.55–39.45.
- Watch for local support at 39.25–39.30.
- A test and close below 39.00–38.90 triggers renewed downside risk.
- Target: 38.15–38.25.
- Watch for local support at 38.75–38.65.
- A test and close below 38.05–37.95 triggers further downside risk.
- Target: 37.15–37.25.
- Watch for local support at 37.75–37.65.
- If downside accelerates, the daily low may form at 36.65–36.95.
Please note: This analysis is provided for informational purposes only. Traders bear full responsibility for the use of this forecast and any resulting direct or indirect losses.
FAQ
What does the WTI CLx contract refer to?
CLx is the ticker symbol for the front-month WTI crude oil futures contract traded on NYMEX; ‘x’ denotes the current active month — here, January 2016.
Why did OPEC’s December 2015 meeting cause market uncertainty?
OPEC announced no production cuts and reaffirmed its market-share-first strategy, leaving oversupply unresolved and shifting pressure to non-OPEC producers — notably intensifying the Iran–Saudi rivalry.
How do pivot points help in oil trading decisions?
Pivot points (e.g., PP = 40.57) identify intraday bias: price above PP favors longs; below favors shorts. R/S levels act as objective entry, target, and reversal zones — especially useful in volatile oil markets.
