The oil price (WTI- #CL) kicked off this week with a bearish gap and approached the low of 68,75. The 2/8 Murray zone is strong support for crude oil. It is expected for the next few days to bounce above this level with targets at the 21 SMA located at 70,77.

The International Energy Agency (IEA) downgraded the outlook for oil demand by around 100,000 barrels per day for both 2021 and 2022, citing the emergence of the Omicron variant weighing on global oil demand.

A surplus in oil inventories of 1.7 million barrels per day could materialize in the first quarter of 2022, an oil surplus of 2 million barrels per day could materialize in the second quarter of 2022.

According to the IEA report, global supply could skyrocket by 6.4 million barrels per day next year compared to an increase of 1.5 million barrels per day in 2021.

In the medium term, oil could be under downward pressure. If inventories continue to increase in the market, the oil price could decline more to the psychological level of 50,00.

On the chart, we can see that oil is trading below the 200 EMA located at 73,55 and below the 21 SMA at 70,77. This technical data provides the negative outlook for oil, which we could expect to fall in the next few days towards 65,62 and even more to the low of December 2 at 62,40.

Our trading plan is to buy as long as it remains above 2/8 Murray, with the target at SMA of 21 at 70,77. Friday's gap at the close of Friday will be covered. A consolidation above 70.77 could boost the recovery of oil to the level of 200 EMA at 73,55.

Conversely, a daily close below 68,40 could quickly accelerate the WTI decline. The objective will be to cover the gap that remains open at 65,62 if the downward pressure prevails up to 62,40. The eagle indicator continues to give the negative signal. It is likely that it could continue the fall in the coming days.

Support and Resistance Levels for December 20 - 21, 2021

Resistance (3) 70,76

Resistance (2) 70,19

Resistance (1) 69,32

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Support (1) 68,72

Support (2) 67,97

Support (3) 67,01

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A trading tip for WTI on December 20 - 21, 2021

Buy above 68,75 (2/8) with take profit at 70,77 and 73,55 (200 EMA), stop loss below 68,30.