From a chart perspective, WTI tested a short-term retracement zone between $59.27 (50% level) and $58.49 (61.8% level) before closing above it. This zone is acting as a pivot for near-term direction.
A sustained move above $59.27 would indicate buying interest, potentially triggering a push toward the 50-day moving average at $61.15 and then the 200-day at $61.71.
That said, the bulls still have work to do. Failure to hold above $59.27 opens the door for another test of $58.49. A breakdown below this retracement support could accelerate selling pressure, putting the $55.96–$55.27 zone in play.
Surplus Concerns Offset Chinese Demand Support
Market sentiment remains fragile. The recent U.S. government shutdown has led to thousands of canceled flights, dampening demand for diesel and jet fuel. With the Federal Aviation Administration limiting airline operations due to staffing shortages, the short-term demand outlook remains cloudy.
On the supply side, OPEC+ agreed to a minor output hike for December but hit pause on any further increases in Q1, signaling unease about flooding the market. Saudi Arabia, facing a well-supplied global market, slashed its December crude prices to Asian buyers.
Still, firm demand out of China is offering some support. October crude imports rose 2.3% from the prior month and 8.2% year-over-year, driven by high refinery utilization rates. Traders say China’s aggressive buying is keeping barrels out of OECD markets, where inventories remain tight.
