Crude Oil Price Update – Buyers Need to Overcome $52.62 to Sustain the Rally

November West Texas Intermediate crude oil futures are trading marginally higher early Monday. The market followed through to the upside after yesterday’s sharp rally, but buying was limited as crude neared a previous main top.

The recent buying in crude oil is being fueled by expectations of increased demand according to reports from OPEC and the International Energy Administration. Buyers are also optimistic that OPEC and other non-OPEC major producers will eventually agree to an extension of current production cuts.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The next upside target on the swing chart is the May 25, 2017 main top at $52.62. This price is a potential trigger point for an acceleration into the next main top target at $54.94.

A failure to overcome $52.62 will mean the buying is getting weaker or the selling is getting stronger. This could lead to a sideways trade with $50.30 the bottom of the range.

Daily Forecast

Based on the current price at $52.25, the first upside target is the May 25 main top at $52.62. Overtaking this level will likely lead to a test of the long-term downtrending angle at $53.12. This is the last potential resistance angle before the $54.94 main top.

The inability of overcome $52.62 will indicate that the upside momentum is slowing. This could lead to a break back to the next downtrending angle at $51.33. Crossing to the weak side of this angle will likely trigger a break back into the best support cluster at $50.39 to $50.30.

The tone of the market the rest of the session is likely to be determined by trader reaction to $52.62.