WTI Crude Oil Price Analysis for December 2, 2019

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WTI crude oil broke below the bottom of its rising channel support to signal that a reversal from the climb is due. Price is pulling up to the broken bottom for a retest, and holding as resistance could take it down to the Fibonacci extension levels next.

The 38.2% level lines up with the swing low to add to its strength as a floor, and stronger selling pressure could take crude oil down to the 50% extension at $54.43 per barrel or the 61.8% level at $54 per barrel. The 78.6% level is located at $53.38 per barrel and the full extension is at $52.59 per barrel.

The 100 SMA is still above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. However, price has already broken below the 200 SMA dynamic inflection point to indicate that bearish momentum is picking up.

RSI is heading up to show that buyers are taking control while sellers take a break. Stochastic is also moving up so price might follow suit while buyers return. Both oscillators have plenty of room to climb before reaching the overbought zone, so bullish momentum could stay in play for a bit longer.

Crude oil took a huge hit as market hopes for a deeper OPEC cut faded, thereby keeping global oversupply concerns in play. It didn’t help that markets were growing weary of waiting for more positive developments in US-China trade talks, as weakening prospects of a compromise could keep global demand for crude oil weak.

Up ahead, inventory data could determine whether or not the breakdown was a fake out or if it is an early indication that a longer-term slide is underway. A large build in stockpiles could sustain the selloff.

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