Crude Oil Charts Signal Cautious Optimism 

Crude oil prices have shown resilience by rebounding from a recent low of $66.73 per barrel and advancing to $70.24, hovering above the 20-period EMA. Although the 20-period EMA has not yet crossed above the 50-period EMA, both the RSI moving above its neutral mark and the Momentum oscillator holding above the 100 baseline indicate a strengthening bullish sentiment. This setup, coupled with several well-defined resistance and support levels, suggests the potential for further upside movement, tempered by caution if sellers reassert control. Understanding these technical signals against the backdrop of stable US refinery operations and slightly declining inventories provides valuable context for traders navigating the current crude oil landscape.

Friday 09:00 am (GMT+2) – UK: GDP m/m (GBP)

After recovering from the recent low of $66.73 per barrel and advancing to $70.24, crude oil prices are positioned above the 20-period Exponential Moving Average (EMA), signaling the potential for an upward move. Notably, the trough at $66.73 did not breach the preceding low, underscoring a focus on the critical resistance level at $71.31.

Currently, prices are trading above both the 20- and 50-period EMAs; however, the 20-period EMA has yet to cross above the 50-period EMA, indicating a cautious bullish alignment. However, the Relative Strength Index (RSI) has moved above the 50 neutral mark, reinforcing a positive sentiment, while the Momentum oscillator, with values exceeding the 100 baseline, suggests growing potential for further upside.

If buyers gain control of the market, traders may focus on the following four key resistance levels:
71.31: The first resistance level is at 71.31, aligning with the swing high marked on November 22.
72.52: The second price target is identified at 72.52, representing the weekly resistance, R3, estimated using the standard Pivot Points methodology.
74.14: The third price objective is established at 74.14, which aligns with the 161.8% Fibonacci Extension drawn from the swing high, 71.31, to the swing low, 66.73.
78.27: An additional price target is set at 78.27, representing the daily high marked on October 8.

If sellers continue to dominate the market, traders may want to monitor the following four key support levels:
67.89: The initial support level is set at 67.89, reflecting the weekly Pivot Point, PP, estimated using the standard methodology.
66.45: The second support level is established at 66.45, representing the low point marked on November 18.
65.07: The third support level is identified at 65.07, aligning with the daily low established on September 10.
64.43: An additional downside target is noted at 64.43, reflecting the weekly support, S2, calculated using the standard Pivot Points methodology.

Last week, US refineries processed an average of 16.7 million barrels of crude oil per day, slightly less than the previous week, operating at 92.4% of their capacity. Gasoline production increased to 10.0 million barrels per day, while distillate fuel production (used for diesel and heating oil) decreased to 5.2 million barrels per day. Crude oil imports dropped to 6.0 million barrels per day, though the four-week average is slightly higher than this time last year.
Crude oil inventories fell by 1.4 million barrels to 422.0 million barrels, which is 6% below the typical levels for this time of year.

Crude oil prices are positioned at a pivotal stage, with technical indicators suggesting a cautiously bullish outlook. While prices remain above key moving averages and momentum indicators support further upside potential, the incomplete alignment of the 20- and 50-period EMAs calls for measured optimism. The well-defined resistance and support levels offer critical benchmarks for market participants to assess the strength and direction of price movements.
From a fundamental perspective, stable refinery activity and moderate declines in crude inventories provide additional context, balancing the technical signals. Traders should remain vigilant, as the interplay of these factors will likely shape short-term price dynamics and market sentiment.