Crude Oil Price Update – Inside Move Suggests Investor Indecision, Impending Volatility

U.S. West Texas Intermediate crude oil is inching higher on Monday, but remain under the multi-month high reached late last week. The market is being underpinned by the OPEC-led supply cuts and U.S. sanctions against Venezuela and Iran. Prices may be getting an additional boost from optimism over a U.S.-China trade deal.

Helping to slow gains are concerns over rising U.S. production, which hit 12 million barrels per day last month. However, these worries are being dampened a little by a report showing U.S. drillers cut the number of operating wells last week.

At 11:23 GMT, April WTI crude oil futures are trading $57.40, up $0.14 or +0.26%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $57.81 will signal a resumption of the uptrend. A trade through $51.62 will change the main trend to down. This move is not likely, however, the market remains vulnerable to a potentially bearish closing price reversal top.

The minor trend is also up. A move through $53.51 will change the minor trend to down. This will also shift momentum to the downside.

The current short-term range is $51.62 to $57.81. Its retracement zone at $54.72 to $53.98 is the primary downside target.

On the upside, the main target is the major 50% level at $59.51.

Daily Technical Forecast

With the market currently trading in the middle of its nearest uptrending Gann angles, and inside Friday’s range, traders should focus on trader reaction to Friday’s high at $57.81 and Friday’s low at $56.71.

Bullish Scenario

A sustained move over $57.81 will indicate the presence of buyers. If this continues to generate enough upside momentum, we could see an eventual move into the major 50% level at $59.51.

Bullish Scenario

A sustained move under $56.71 will signal the presence of sellers. This could trigger a break into an uptrending Gann angle at $56.12.

Closing Price Reversal Top Scenario

Taking out $57.81 then closing lower for the session will form a closing price reversal top. This could trigger a 2 to 3 day correction with an eventual break into at least $54.72.