Crude oil prices were lower by 1.33% on the day as the European trading session was getting underway. Today’s volatility in prices was so far within last week’s price range of $55.74 to $57.84, and today’s slide, which was induced by lower stock markets had so far not altered the very short-term trend of crude oil prices.
Looking beyond the near-term price-action, the crude oil price trend remains upwards above the October 31 low at $53.71, however, despite the upward trend in prices, buyers struggled to lift the price since last week. One explanation for this behaviour is that the price is guided by a price-channel as seen in the chart below, the upper trend line is capping the price, also the channel suggests that traders will prefer to buy near $54.53 where the lower upward sloping trending is situated right now. Simple trend and Fibonacci analysis is suggesting something similar and hints that traders might be interested to buy between the October 31 low at $53.71 and the 50% correction level of the latest bull leg at $55.57.
The alternative scenario, is if bulls manage to muster a breakout above last week’s high of $57.87, and this might lift the price towards the next support level at $59.40, however, with stock markets in retreat today, it does not seem like a likely scenario in the next 24 hours.