Back on September 10th, NYMEX crude oil traded above $100 a barrel for the first time since late May.
Oil continued higher into September 15th and has been pulling back since then. And with everything continuing with the Iran war, I think it’s important for all traders, no matter what timeframe or market you trade, to keep an eye on oil.
Here’s what I’m seeing on the daily chart right now.
Oil Is Approaching an Important Support Level
Up ahead is support currently at 88.51.
I say currently because oil changes contracts every month, so the specific pricing may alter. But 88.51 right now represents the 50% retracement of the advance from the August 26th low to the September 15th high.
The 50% retracement is a critical level that I use in many different ways in trading.
In fact, I talk about it pretty early in my Trading Methodologies of W.D. Gann, Second Edition book, going deeper into it in Chapter 3, Interpreting the Market (pg 33).
Coming back to the oil chart, the intraday action so far has come down to 89.16.
I suspect the 50% retracement support at 88.51 will hold, at least short term. Meaning, I expect oil to trade higher from here.
Now, I don’t necessarily expect oil to go to the moon. 😉
There are other fundamental factors that can affect it day to day. For example, changes in supply, like we saw this week where more Arab oil came into the market. An increase in supply can mean lower prices.
Three Oil Resistance Levels I’m Monitoring Next
Over the next couple of weeks, I’ll be monitoring three important levels:
- 96.53 — the old low of the September 15th range
- 99.30 — the 50% retracement of the September 15th range
- 102.07 — the September 15th high itself
Again, the 50% retracement is a very versatile measurement, which is why you’ll see me use it in many different ways in my market analysis.
Why I Use the Continuous Oil Contract
If you plot the continuous contract chart like I do, you can see that right now it’s representing November 2026 pricing.
That means you don’t have to worry about changing your oil chart for analysis each month as the futures contract changes.
If you decide to plot the current individual contract month instead, then obviously you’ll have to make that adjustment.
I’m going to continue monitoring the continuous contract chart. That’s what the @ symbol on my TradeStation chart stands for. Since I’m monitoring oil here rather than trading directly from this chart, that’s all I need.
Why Oil Still Matters for Traders
Remember, there are still other major stories happening in the markets.
We just had our first Fed rate hike in three years. AI stocks continue to be a large part of the market story. And, of course, there’s plenty more going on depending on which markets you trade.
I do think that with the sustained Iran war, keeping tabs on oil is definitely helpful.
My guess is that the conflict will last at least through U.S. Election Day (Tue Nov 3rd), likely beyond.
So I’ll continue watching how crude oil behaves around this 88.51 support level and what happens next.
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