Crude Oil Price Update – Could Strengthen Over $62.29, Weaken Under $60.83

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Friday as lower crude production in Libya offset expectations that rising coronavirus cases in India and Japan would cause energy demand to decline. Stronger-than-expected U.S. factory data and a drop in the number of U.S. oil rigs also provided support.

At 20:24 GMT, June WTI crude oil futures are trading $62.14, up $0.71 or +1.16%. This is up nearly $1.00 from the intraday low at $61.25.

Libya said its oil production fell to about 1 million barrels per day in recent days and could drop further due to budgetary issues. Additionally, data showed U.S. factory activity powered ahead in early April, giving a lift to Wall Street, while a rebound in new home sales exceeded expectations in March. Finally, U.S. energy firms cut the number of oil rigs operating for the first time since March even though higher oil prices in recent months have prompted some drillers to return to the wellpad.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $64.38 will change the main trend to up. Taking out $57.29 will signal a resumption of the downtrend.

The minor trend is also down. A new minor bottom was formed at $60.61. Taking out this level will indicate the selling pressure is getting stronger.

The short-term range is $67.29 to $57.29. Its retracement zone at $62.29 to $63.47 is resistance.

The minor range is $57.29 to $64.38. Its 50% level at $60.83 is support. This level stopped the selling at $60.61 on Thursday.

The main range is $51.04 to $67.29. Its retracement zone at $59.17 to $57.25 is the major support. This area is controlling the longer-term direction of the market.

Short-Term Outlook

Since a new secondary lower top was formed this week following a test of $62.29 to $63.47, this is the key area to watch over the short-term.

A secondary lower top won’t mean anything unless it leads to a new lower bottom so we’re going to need to see a break under $57.29 to confirm its importance.

Conditions could change from bearish to potentially bullish rather quickly if the buying is strong enough to take out $63.47.

The battleground over the near-term is likely to be $62.29 to $63.47. This zone is essentially controlling the short-term direction of the market.