Crude Oil Price Update – $63.87 Upside Breakout Point, $62.24 -$61.93 Potential Support Area

U.S. West Texas Intermediate crude oil futures spiked higher early Friday on speculative buying and short-covering after a U.S. airstrike at the Baghdad International Airport raised supply concerns.

The airstrike killed Iranian Major-General Qassem Soleimani head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis, an Iraqi militia spokesman told Reuters. The Pentagon later confirmed it was a U.S. air strike that killed Soleimani

At 08:18 GMT, February WTI crude oil is trading $63.04, up $1.86 or +3.04%.

The market is currently backing off its high as traders assess the impact of the move on oil prices. So far there have been no reports of damage to supply lines. However, traders are worried about retaliation, which is why we believe the market will remain underpinned over the near-term.

Remember what happened in the market after the attacks on Saudi production facilities in September. The market initially spiked higher, but prices began to fall after the damage was assessed. Basically, “no oil spilled, no significant rally”.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed after a two-day setback when buyers took out the last swing top at $62.34.

The rally stalled at $63.84, just short of the April 22 top at $63.87. Taking out this level could trigger an acceleration to the upside with the October 26, 2018 top at $66.64 the next major upside target.

The first minor range is $60.63 to $63.84. Its 50% level target is $62.24.

The second minor range is $60.02 to $63.84. Its 50% level target is $61.93.

The third minor range is $57.62 to $63.84. Its target level is $60.73.

Daily Swing Chart Technical Forecast

February WTI crude oil is trading slightly above the first pivot at $62.24 and slightly below the main top at $63.87.

We’re in a news driven market so any extremely bullish news could trigger a breakout over $63.87. There is plenty of room to run over this level with $66.64 the next major upside target.

Since the trend is up and traders are on heightened alert I expect to see buyers come in on pullback into the minor pivots at $62.24 and $61.93.

Taking out $60.63 and changing the main trend to down will indicate there is something wrong with the market.

Remember, all we’ve had is an airstrike. Bullish traders want to see some oil spilled. Watch for retaliation.