Crude Oil Price Update – Near-Term Strength Over $60.37, Weakness Develops Under $58.94

U.S. West Texas Intermediate crude oil futures are trading higher late Friday after hitting a three-month higher earlier in the session. The catalysts behind today’s spike to the upside was the announcement of progress in resolving the U.S.-China trade dispute and a decisive general election result in Britain.

Shortly after the regular session opening, China’s Vice Finance Minister said the first phase of trade negotiations achieved major progress and Beijing has decided to cancel tariffs scheduled to take effect on Sunday.

Britain’s ruling Conservative Party won a large majority in Thursday’s general election, paving the way for Prime Minister Boris Johnson to remove the country from the European Union.

Traders feel that these events along with a weaker U.S. Dollar could keep upside pressure on crude oil over the near-term.

At 19:28 GMT, February Comex gold is trading $59.97, up $0.91 or +1.54%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the last high at $59.74. Today’s intraday high is $60.39, slightly above the September 16 main top at $60.37.

The minor trend is also up. A trade through $57.62 will change the minor trend to down. This will also shift momentum to the downside.

Short-Term Outlook

The key level to watch over the near-term is $60.37. This top was put in on September 16, during the height of the attacks on the Saudi oil production. At that time, prices spiked higher due to extraordinary conditions and worries over supply.

This time around, traders have the deeper OPEC production cuts underpinning prices and a better outlook for demand growth due to the easing of trade tensions between the United State and China providing additional support.

On the downside, the key support is an uptrending Gann angle. This angle, moving up at a rate of $0.25 per day since the $54.75 main bottom on November 20, is currently at $58.75. Holding above this angle will help maintain the strong upside bias.