Crude Oil Price Update – In Position to Challenge Contract High at $116.43 into Close

U.S. West Texas Intermediate crude oil futures are trading higher shortly before the close on Friday. The move is solidifying a positive close for the week.

The catalysts behind today’s strength are expectations of an agreement by European nations to ban Russian crude oil and the anticipation of the start of peak gasoline demand season in the United States.

At 18:00 GMT, July WTI crude oil is trading $115.13, up $1.04 or +0.91%. The United States Oil Fund ETF (USO) is at $85.43, up $0.84 or +0.99%.

The European Union government envoys could reach an agreement in Brussels on Sunday in time for leaders to endorse it at their May 30-31 summit, officials said. An agreement to ban Russian oil would be a bullish development since it would tighten global supplies.

Additional support is being provided by low U.S. gasoline stockpiles and the anticipation of greater demand for fuel as the U.S. begins its summer driving season this weekend.

This upcoming weekend’s U.S. Memorial Day travel is expected to be the busiest in two years, causing fuel demand to rise as more drivers hit the road and shake off coronavirus pandemic restrictions despite high fuel prices, Reuters wrote.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the March 7 top at $116.43 will reaffirm the uptrend. A move through $103.24 will change the main trend to down.

The minor trend is also up. A trade through $108.61 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is $116.43 to $88.53. The market is trading on the strong side of its retracement zone, making it support.

Daily Swing Chart Technical Forecast

Trader reaction to $114.09 will determine the direction of the July WTI futures contract into the close on Friday.

Bullish Scenario

A sustained move over $114.09 will indicate the presence of buyers. Taking out the intraday high at $115.30 will indicate the buying is getting stronger. This could trigger a late session surge into the main top at $116.43.

Bearish Scenario

A sustained move under $114.09 will signal the presence of late session sellers. This won’t change the trend but it will put the market in a position to post a potentially bearish closing price reversal top.