Crude Oil remains weak, exposing big support

WTI Crude Oil futures remain under pressure within a weak trend after the 38.2% and 61.8% retracements of the late September–late October decline capped upside between 59.95 and 64.42 from late October through early December. Renewed weakness after testing these retracements as resistance is approaching key support at the late October and May/April lows from 55.96 down to 55.30-55.12.

Chart 1: WTI Crude Oil futures: Daily

Sitting just below the 55.95-55.12 support highlighted above is the big 61.8% retracement of the 2020 to 2022 rally at 53.86. If support and this retracement level break, the risk builds for a deeper drawdown to 50.99-50.52 (June-October 2019 lows) and then toward 43.78-42.50 (bigger support from levels seen in late 2020 to late 2016).

If WTI Crude Oil attempts a rally, declining 13-, 26-, and 40-week moving averages (WMA) provide a potential overhang from 59.68 to 63.01. The declining 26 and 40-WMAs have offered resistance since early July.

Chart 2: WTI Crude Oil futures: Weekly