James Hyerczyk
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WTI Crude Oil

U.S. West Texas Intermediate crude oil futures are trading sharply higher at the mid-session on Monday as production cuts and the easing of stay-at-home restrictions underpinned prices. The market is at a two-month high, one day ahead of the June futures contract expiration.

A month ago, the expiring May futures contract made history when it traded at minus $35.73. Today’s surge in the nearby June futures contract means spot prices are worth $68.44 more than they were a month ago. But I suspect the negative prices were all an aberration.

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At 14:45 GMT, July WTI crude oil is trading $32.71, up $3.28 or +11.15%.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The next upside target on the swing chart is the April 9 main top at $35.18. A trade through the last main bottom at $17.27 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. A trade through the last minor bottom at $24.38 will change the minor trend to down. This will shift momentum back to down.

The short-term range is $35.18 to $17.27. Its retracement zone at $28.34 to $26.23 is support.

The main range is $54.86 to $17.27. Its retracement zone at $36.07 to $40.50 is the primary upside target.


Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $32.71, the direction of the market the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at $29.52.

Bullish Scenario

A sustained move over $29.52 will signal the presence of buyers. If this continues to create upside momentum over the near-term then look for the really to eventually extend into $35.18 to $36.07.

Bearish Scenario

A sustained move under $29.52 will indicate the presence of sellers. This will also put the market in a position to form a potentially bearish closing price reversal top. This could lead to a 2 to 3 day correction into $28.34 to $26.23.

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