Crude Oil Price Update – Bullish Over $57.85, Bearish Under $57.65

February West Texas Intermediate crude oil futures are trading higher shortly ahead of the regular session opening and today’s U.S. Energy Information Administration’s weekly inventories report. The market is being supported by continuing concerns over the Forties pipeline outage and expectations of another draw down in crude oil inventories. Traders expect the EIA report to show a decline of 3.6 million barrels.

Daily Technical Analysis

The main trend is down according to the daily swing chart, but momentum has shifted to the upside. A trade through $58.60 will change the main trend to up. A move through $56.11 will signal a resumption of the downtrend.

Support is being provided by the short-term Fibonacci level at $57.65, the short-term 50% level at $57.36 and the major pivot at $57.07.

Daily Technical Forecast

Based on the early price action, the direction of the February WTI crude oil futures contract the rest of the session will be determined by trader reaction to the downtrending Gann angle at $57.85.

A sustained move under $57.85 will signal the presence of sellers. This could trigger a break into the Fib level at $57.65. This is the trigger point for a possible acceleration into $57.36. We could see another sharp break if $57.36 fails with potential targets at $57.11 and $57.07.

Overtaking and sustaining a rally over the downtrending Gann angle at $57.85 will indicate the buying is getting stronger. This move may generate enough upside momentum to challenge $58.11 then $58.23.

Essentially, we’re looking for an upside bias to develop on a sustained move over $57.85 and for a downside bias to develop on a sustained move under $57.65.