Crude Oil remains stuck in tight range for four consecutive day

• Crude Oil is stuck in a tight range while the $71 level gets broken up. 
• Traders digest Donald Trump’s victory, while concerns about Chinese demand are reemerging. 
• The US Dollar Index seems to have found a floor after Fed Chairman Powell said he is committed to finishing his term. 

Crude Oil dips slightly on Friday but remains within the tight range it has been trading in the past four days. The market euphoria following President-elect Donald Trump’s victory appears to be fading as energy markets shift their focus to China, where the prospect of higher US tariffs could continue to hurt growth even more in the context of already sluggish demand for Oil. This could mean even less demand than already forecasted for 2025.

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, has found support after markets were reassured by Federal Reserve (Fed) Chairman Jerome Powell. Not only did the Fed deliver its 25 basis points (bps) rate cut, but Powell said as well he is not going anywhere. This might take away some uncertainty on whether Powell would finish his remaining two years at the helm of the Fed after Trump’s victory cast some doubts over Powell’s future. 

At the time of writing, Crude Oil (WTI) trades at $70.97 and Brent Crude at $74.54.

Oil news and market movers: China takes over

• The market rally is easing broadly as the so-called Trump trades take a breather and concerns about China are taking over, Bloomberg reports. 
• Looking back to the Oil supply in October from OPEC, production climbed by 370,000 barrels a day. The main part of that increase is from the recovery in Libyan output to above 1 million barrels a day after the resolution of the political crisis over central bank leadership, Bloomberg reports.
• Tropical Storm Rafael is set to hit Texas and Louisiana shores by Saturday, although its impact should remain small with the centre of the Tropical Storm not expected to make landfall, Reuters reports. 

Oil Technical Analysis: Not Trump, than China

Crude Oil prices are unable to catch a break, which in this case makes sense. Where there are winners, there are losers, and the upcoming US tariffs on China are an issue for Oil. High tariffs would mean that China's exports and economy could face even more setbacks, leading to less demand for Oil from China in 2025 than already anticipated. 

On the upside, the hefty technical level at $74.11, with the 100-day Simple Moving Average (SMA) and a few pivotal lines, is the next big hurdle ahead. The 200-day SMA at $76.79 is still quite far off, although it could get tested in case tensions in the Middle East arise. 

The 55-day SMA at $70.81 is still to be considered, although it has lost a lot of strength after being chopped up throughout the week. Traders need to look much lower at $67.12, a level that supported the price in May and June 2023. In case that level breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart