Crude Oil Price Update – Bullish Over $57.71, Bearish Under $57.35

January West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening. The market is being driven higher by rising Chinese crude demand and threats of a strike in Africa’s largest oil exporter.

China’s crude oil imports rose to 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of a potentially bullish closing price reversal bottom on Thursday and its subsequent confirmation earlier today.

A trade through $58.88 will change the main trend to up. A move through $55.82 will negate the closing price reversal bottom and signal a resumption of the downtrend with the next target the main bottom at $55.00.

The main range is $55.00 to $59.05. Its retracement zone is $57.03 to $56.55. After trading to the weak side of this zone on Thursday, the market has recovered enough to cross over to the strong side today. This makes this retracement area new support.

The short-term range is $58.88 to $55.82. Its retracement zone at $57.35 to $57.71 is currently being tested. This zone is very critical to the chart’s structure. Since the main trend is down, sellers may show up on the test of this zone in an effort to form a potentially bearish secondary lower top. Aggressive, counter-trend buyers will try to drive through this zone in an effort to make $55.82 an important main bottom.

Daily Technical Forecast

Based on the earlier price action, the direction of the crude oil market today is likely to be determined by trader reaction to the Fibonacci level at $57.71.

A sustained move over $57.71 could trigger another jump in prices into Gann angle targets at $57.63 and $58.26.

A sustained move under $57.71 will signal the return of sellers. They may try to drive the market into the 50% level at $57.35, followed by an uptrending angle at $57.13, a 50% level at $57.03 and a Fibonacci level at $56.55.