WTI bears look for a downward continuation for the next few days

• WTI bears are moving at a critical juncture.
• A break of horizontal support exposes the downtrend.

West Texas Intermediate it is up more than 2.45% at the time of writing, and has ranged from a low of $76.03 to $79.61. The price has consolidated at the top of a channel and on the previous day’s compression of shorts. Risk Markets were weak amid light activity as the end of the month approached.

For its part, West Texas Intermediate has been favored by the hope that China will relax its strict zero córdobas policy, while OPEC+ has decided to meet virtually at its meeting on December 4 to set production quotas. The good news reached the markets when the Chinese government announced that it will boost vaccination against Covid-19, while taking a step back from its quarantine policies.

On the other hand, and despite the market rumors, OPEC has not indicated that it plans further cuts at its meeting, since European sanctions on Russian oil imports take effect on December 5. However, negotiations on a price cap for Russian oil are continuing.

Analysts at ANZ Bank said: “Germany has warned that temporary supply bottlenecks cannot be ruled out when the Russian crude import ban comes into effect next month. OPEC also appears to be cutting production in line with your cut deal.”

For next week, the focus is on Federal Reserve Chairman Jerome Powell’s speech on the US economy and labor market at Friday’s Non-Farm Payrolls event.

WTI Technical Analysis

As illustrated, price meets the top of the channel, in front of trend line resistance, breaking out of the horizontal structure and positioning for a continuation lower.