Crude Oil Price Update – Minor Trend Turns Up, Shifting Momentum to Upside

U.S. West Texas Intermediate crude oil futures are trading higher on Thursday. The market has been supported all session by hopes that OPEC and its allies will extend their strategy to reduce output while trimming the global supply excess. Comments from a Saudi Arabian official suggest the country is going to cut more than it initially pledged in December.

Furthermore, increased demand for risk is also providing some upside momentum. Later today, traders will get the opportunity to react to the American Petroleum Institute’s weekly inventories report. It is expected to show U.S. inventories rose by 2.9 million barrels during the week-ending March 8.

At 15:09 GMT, May WTI crude oil futures are trading $57.61, up $0.48 or +0.88%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a move through $58.26. A trade through $54.87 will signal a resumption of the downtrend.

The minor trend is up. It turned higher earlier today when buyers took out the previous minor top at $57.37. This shifted momentum to the upside.

The short-term range is $58.28 to $54.87. Its 50% level or pivot at $56.58 is controlling the direction of the index today. Holding above this level is helping to generate an upside bias.

Daily Technical Forecast

Based on the early price action, the direction of the May WTI crude oil futures contract is likely to be determined by trader reaction to the downtrending Gann angle at $57.39.

Bullish Scenario

A sustained move over $57.39 will indicate the presence of buyers. If the upside momentum continues then look for the rally to possibly extend into the downtrending Gann angle at $57.82. This angle stopped the rally earlier in the session. Overtaking this angle could trigger a further rally into the next downtrending Gann angle at $58.04. This is the last potential resistance angle before the $58.26 main top.

Bearish Scenario

A failure to hold $57.39 late in the session will signal the return of sellers. The first downside target is a steep uptrending Gann angle at $56.87. If this angle fails then look for the selling to extend into the pivot at $56.58.