Crude Oil Price Update – Close Under $61.70 Forms Closing Price Reversal Top; API Report on Tap

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Tuesday, but peeling back from its earlier multi-month high. The strength is being driven on signs that global coronavirus restrictions were being eased although traders are still worried about the pace of the U.S. economic recovery and the return of Texas oil production kept gains capped.

At 20:04 GMT, April WTI crude oil is trading $61.90, up $0.20 or +0.32%.

The price action suggests the buying may be weakening or the selling is strengthening. The biggest worry for bullish traders is likely to be the closing price reversal top. Although it won’t change the trend, it could signal the start of a 2 to 3 day counter-trend correction.

We could see some volatility at 21:30 with the release of the American Petroleum Institute (API) weekly inventories report. Traders are predicting a crude oil draw of about 6.5 million barrels. This reflects the damage from last week’s Arctic freeze in Texas.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was re-established when buyers took out $62.29 early in the session. A late session surge through $63.00 will signal a resumption of the uptrend. The main trend will change to down on a trade through $57.31.

The minor trend is also up. A trade through $58.60 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $57.31 to $63.00. Its 50% level at $60.16 is a potential downside target and possible support.

The short-term range is $51.53 to $63.00. If the main trend changes to down then its retracement zone at $57.27 will become the next potential support area.

Daily Swing Chart Technical Forecast

The direction of the April WTI crude oil market into the close will be determined by trader reaction to Monday’s close at $61.70.

Bullish Scenario

A sustained move over $61.70 will indicate the presence of buyers. If this generates enough upside momentum then look for a retest of the intraday high at $63.00, followed closely by the October 29, 2018 main top at $63.53.

Bearish Scenario

A sustained move under $61.70 will signal the presence of sellers. This could trigger a late session break toward the first pivot at $60.16.

Closing Price Reversal Top

A close under $61.70 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.