Crude Oil Price Update – Minor Trend Changes to Up on Trade through $64.14

U.S. West Texas Intermediate crude oil is recovering after early session weakness, helped by a report that Saudi Arabia and Russia are discussing oil output cuts in 2019. This makes sense since the market is currently oversupplied. This would also take care of a problem that began when the Saudis and Russians agreed to ramp up production to offset a loss of Iranian oil due to the U.S. sanctions and the U.S. decided to offer waivers to eight major buyers of Iranian crude.

At 1343 GMT, December WTI crude oil was trading $62.77, up $0.56 or +0.91%.

At 1530 GMT, the U.S. Energy Information Administration is scheduled to release its weekly inventories report. The report is expected to show a 2.00 million barrel build.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $61.31 will signal a resumption of the downtrend. If this move creates enough downside momentum then look for a possible drive into the April 4 bottom at $59.70.

Overtaking the two former bottoms at $62.32 and $63.48 will indicate that shorts are covering.

The minor trend is also down. A trade through $64.14 will change the minor trend to up. This will also shift momentum to the upside.

Daily Technical Forecast

Based on the early price action, the direction of the December WTI crude oil market the rest of the session is likely to be determined by trader reaction to $62.32.

A sustained move over $62.32 will indicate the presence of buyers. If the short-covering rally is strong enough then look for buyers to take out the next former top at $63.48. This will indicate the buying is getting stronger.

The next target is the minor top at $64.14. Taking out this level will change the minor trend to up and likely lead to a test of the downtrending Gann angle at $64.22. Since the main trend is down, we’re likely to see sellers come in on a test of the Gann angle. This angle is also the trigger point for an acceleration to the upside.

A sustained move under $62.32 will indicate the return of sellers. This could drive the market into $61.31. We could see an acceleration to the downside if this low fails with $59.70 the next major downside target.