Crude Oil Extends Downward Trend
Crude oil continued its downward momentum Wednesday that began at the beginning of this week.
The December futures price for a barrel of West Texas Intermediate (WTI) crude oil fell by 87 cents Wednesday to settle at $65.31. The intraday range for the benchmark was a high of $67 even and a low of $65.01.
For the Brent, the global benchmark declined 44 cents to settle at $75.47 a barrel.
“The daily charts for December WTI and January Brent crude oil show the market holding above major support levels,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc.
Despite recent bearish price movements, Rafferty still sees a potential upside.
“While the crude markets have declined further than we had expected, as long as December WTI holds above 6495 and January Brent holds above the 7515 to 7476 areas, we remain bullish,” said Rafferty. “We still believe that buying around these levels provides favorable risk/reward. A close below these levels would cause us to change our outlook.”
November reformulated gasoline (RBOB) also declined during midweek trading, losing nearly four cents to settle at $1.77.
The December Henry Hub natural gas futures price picked up seven cents to end the day at $3.26. Rafferty observed that gas prices have been in a holding pattern lately.
“Since breaking out above the previous resistance at the 3100 area four weeks ago, December natural gas has met resistance at the 3350 to 3400 area,” Rafferty said. “The market is now trading within a sideways consolidation pattern defined by the 3100 area at the bottom and the 3350 to 3400 areas on the top.”
A weekly continuation chart provided by Rafferty’s firm illustrates the sideways pattern.
“We continue to want to buy and sell against these levels until the market can break, on a closing basis, beyond these parameters one way or another,” Rafferty concluded.
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