A 9-million-barrel US crude stock build weighs on WTI

Mehdi Mohammadi, an adviser to Iran’s chief negotiator Mohammad Bagher Ghalibaf, said Washington was weighing renewed military action or tighter sanctions. He said the US had indicated that President Donald Trump could decide on military action in about two weeks. Mohammadi claimed Washington was preparing a limited strike despite Trump’s earlier remarks downplaying the military option. He said Tehran was preparing a response and described Washington’s reply to Iran’s latest proposals for reopening the Strait of Hormuz as unsatisfactory.

US crude inventories rose by 9.0 million barrels after falling by 5.267 million barrels the previous week, according to data from the American Petroleum Institute (API). The US Energy Information Administration (EIA) is due to publish its inventory report on November 12 at 19:00 (GMT+2), according to its holiday release schedule. The forecast is for a draw of 600,000 barrels following the previous week’s decline of 865,000 barrels.

Support and resistance levels

On the daily chart, WTI remains well below the support line of the rising channel bounded by 111.00 and 90.00, extending the decline covered in our November 9 WTI outlook.

The technical indicators reinforce the sell signal. The Alligator’s faster moving averages sit well below the slower ones, while the Awesome Oscillator (AO) histogram is moving farther from zero.

Support levels are 83.00 and 76.40.

Resistance levels are 87.40 and 94.20.

Trading scenarios and WTI crude oil price forecast

Short positions may be opened if the price breaks and holds below 83.00, targeting 76.40 with a stop-loss at 87.00. The expected time horizon is seven days or longer. Long positions may be opened if the price breaks and holds above 87.40, targeting 94.20 with a stop-loss at 84.00.