Crude Oil Price Update – Bullish Over $42.01, Bearish Under $41.34

U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session on Monday as storms closed in on the Gulf of Mexico, shutting more than half its oil production, and on signs of progress in development of a COVID-19 treatment.

Energy companies shut more than 1 million barrels per day (bpd) of offshore crude oil production in the U.S. Gulf of Mexico because of the twin threat from Hurricane Marco and Tropical Storm Laura. Workers have been evacuated from more than 100 production platforms.

At 16:07 GMT, October WTI crude oil futures are trading $42.63, up $0.38 or +1.02%.

Oil price gains are being kept in check by an increase in the U.S. oil and natural gas rig count for the first time since March, with the addition of the most oil rigs in seven months as shale producers resume drilling.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $43.68 will reaffirm the uptrend. The main trend will change to down on a trade through $39.00.

The minor trend is also up. A trade through $41.33 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is $39.00 to $43.68.  Its 50% level at $41.34 is support.

The major support remains the long-term 50% level at $42.01.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the October WTI crude oil market into the close on Monday is likely to be determined by trader reaction to the 50% level at $42.01 and the minor bottom at $41.33.

Bullish Scenario

A sustained move over $42.01 will indicate the presence of buyers. If this is able to create enough upside momentum, then look for buyers to make a run at the minor top at $43.29, followed by the main top at $43.68.

Bearish Scenario

A sustained move under $41.33 will signal the presence of sellers. This could trigger an acceleration to the downside with $39.00 the next target.