In this WTI oil forecast, experts from the FORTRADER magazine provide you with a technical analysis of the asset for today, as well as trading recommendations with specific levels. All trading signals mentioned in this forecast are based on the proprietary strategy of a practicing trader, but they are only for informational purposes.
Summary of the Previous Trading Day
On Friday, December 4, WTI oil – CLx (January 16) closed the trading session with the following parameters:
- High for the day (H) = 42.00 (+0.22*)
- Low for the day (L) = 40.07 (-0.47*)
- Closing price for the day (C) = 39.97 (-1.11*)
- Official closing price of CL (December 15) = 40.39 (-0.42*)
(* – compared to the previous day, dollars per barrel).
The previous session for the January 2016 WTI oil futures contract showed strong intraday volatility.
On Friday in Vienna, the 168th meeting of OPEC ministers took place. This event was significant for participants in the oil market and all financial markets. The summit was expected to bring actions and decisions to address the prolonged period of low oil prices. Prior to the summit, statements and ‘leaks’ of possible outcomes of the cartel’s decision were reported. However, the outcome left market participants in a situation of ‘extreme uncertainty’.The decision on the level of 31.5 million barrels per day was accepted by the oil market as an ‘expansion of the current quota’.
However, later official representatives denied this assumption. It was stated that the cartel had not taken a decision on limiting the quota. The daily production figures were adjusted to the actual level of OPEC production. The increase to 31.5M was due to Indonesia’s return to the cartel. In the final statement, it was indicated that Iran’s return to the oil export market would have a significant impact, and how it would be received and where the balance of supply and demand would stabilize is currently unpredictable. To adopt a more appropriate policy, the cartel decided to review the market situation at its next meeting. In the end, OPEC, for the first time in many years, did not consider the issue of production quotas. It can be said that the cartel made the preservation of market shares of producing countries its main priority, despite the fact thatoil prices were near their lowest levels since 2009.
Data from Baker Hughes showed a weekly decrease of 7 active drilling rigs to 737 units. Year-over-year, the number of rigs decreased by 1183 units. The number of oil drilling rigs decreased by 10 units to 545. The number of gas drilling rigs increased by 3 units to 192 units.
The number of non-agricultural jobs in the United States increased by 211K.
The November unemployment rate in the United States was 5.0%.
Labor market data showed strong performance. Note that in the FOMC decision on interest rates, employment is one of the priority indicators.
The tension between Turkey and Russia is increasing. Russian leadership is imposing economic sanctions against Turkey. Countries are exchanging sharp statements about the development of the conflict.
Russian leadership continues to implement restrictive measures against Turkey. Turkey, in turn, begins to look for alternative gas supply sources and considers measures to support its economy.
Countries are exchanging sharp and contradictory accusations and statements. Recall that Turkey is a NATO member, and the alliance has adopted a support program under the current conditions. Specifically, it was decided to strengthen Turkey’s air defense system, send additional military contingents from alliance countries, and enhance reconnaissance and early warning systems.
On the weekend, Iran and Turkey exchanged sharp statements and accusations. The essence of these statements revolved around the Turkish military base located on Iranian territory and the planned rotation of Turkish troops.
Recall that Turkey controls maritime traffic through the Bosporus and is one of the main nodes for the transportation of crude oil and petroleum products.
The Turkish Navy is conducting large-scale exercises in the strait area. An incident involving a Russian warship occurred over the weekend. Turkey expressed sharp concerns about the possibility of a similar incident with Russian ships.
News Background Affecting Oil Prices on December 7, 2015
The news background during the day for the oil market is relatively neutral. Data and news received during the day will be considered in the context of the current state and assessments of future demand. FORTRADER experts draw your attention to the publication of a limited block of data from the US, EU, and UK. Data on China’s trade balance and a large block of data from Japan are published. During the day, officials from the Eurogroup, the Bank of England, and the FOMC make statements.
Support, Resistance, and Pivot Point Levels for WTI Oil Today, December 7, 2015
Resistance Levels (January 16):
- R3 = 43.93
- R2 = 42.96
- R1 = 41.55
Middle Line:
- PP = 40.57
Support Levels:
- S1 = 39.15
- S2 = 38.18
- S3 = 36.77
Summary of Open Positions on December 4, 2015
During the working hours, no positions for buying or selling oil were opened.
Trading Plan for WTI Oil on December 7, 2015
Trading Strategy for Today
When trading futures on oil today, we take into account the following factors:
- We take into account the strong intraday dynamics and volatility of the previous day’s price, which led to mixed calculated levels of support and resistance, carrying risks of both strong price breakthroughs and movement limitations, as well as risks of developing strong corrective price movements within the day.
- Development of the situation in Syria and the region in general. Incoming news and rumors may cause increased volatility in the markets.
- Development of the crisis between Turkey and Russia. Dynamics, statements, and events carry the risk of increased price volatility.
- We take into account the indirect influence on the price dynamics of the US Dollar Index. We
FAQ
What is the focus of the WTI oil forecast for December 7, 2015?
The forecast provides technical analysis and trading recommendations for WTI oil (CLx) based on a proprietary strategy.
What were the key factors affecting oil prices on December 4, 2015?
OPEC’s decision not to set production quotas, volatility in the oil market, and geopolitical tensions between Turkey and Russia influenced oil prices.
What are the support and resistance levels for WTI oil on December 7, 2015?
Resistance levels are R1 = 41.55, R2 = 42.96, R3 = 43.93; support levels are S1 = 39.15, S2 = 38.18, S3 = 36.77.
