Crude Oil Price Update – Big API Draw Down Could Trigger Breakout Over $58.74

U.S. West Texas Intermediate crude oil futures are trading higher late Tuesday. The market is being underpinned by optimism over a U.S.-China trade deal that could help improve the future demand picture.

Also helping to support prices is the hope that OPEC and its allies will agree to extend production cuts until at least June 2020. Finally, buyers are also betting on today’s American Petroleum Institute (API) report, due to be released at 21:30 GMT, to show a draw down after five weeks of builds.

At 19:53 GMT, January WTI crude oil futures are trading $58.43, up $0.42 or +0.72%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $58.74 will signal a resumption of the uptrend. The main trend will change to down on a trade through $54.85.

The minor trend is also up. A trade through $57.21 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $61.48 to $50.69. Its retracement zone at $57.36 to $56.08 is support. Trading on the strong side of this zone is helping to generate the upside bias.

The short-term range is $54.85 to $58.74. Its 50% level or pivot at $56.80 is also support. It fall inside the main retracement zone.

Daily Technical Forecast

Based on the early price action and the current price at $58.43, the direction of the January WTI crude oil futures contract into the close is like to be determined by trader reaction to the downtrending Gann angle at $58.29.

Bullish Scenario

A sustained move over $58.29 will indicate the presence of buyers. The first target is $58.74. Taking out this level could trigger an acceleration to the upside with the next target angle coming in at $59.89.

Bearish Scenario

A sustained move under $58.29 will signal the presence of sellers. This could trigger a break into the main Fibonacci level at $57.36. If this fails to hold then look for further pressure into $57.21 then $56.80.

The short-term 50% level at $56.80 is a potential trigger point for an acceleration into the main 50% level at $56.08.