U.S. West Texas Intermediate crude oil futures finished on a high note on the last day of trading on Friday. The market also closed over the psychological $60.00 level and at its highest level since mid-2015.
February WTI crude oil futures settled at $60.42, up $0.58 or +0.97%.
The market was supported last week by continued compliance with the OPEC-led plan to reduce output, trim the global supply and stabilize prices. Additional support was provided by the shutdown of a major North Sea pipeline and a pipeline explosion in Libya earlier in the week.
A slight drop in U.S. production last week and signs of increased demand from China also supported prices.
Technically, the main trend is up according to the daily swing chart. Last week, the market crossed to the strong side of a top from August 31, 2015 at $59.38. This reaffirmed the uptrend. It is now new support.
Additional support levels are three former tops at $58.99, $58.90 and $58.60. A break back under these levels will indicate the selling may be greater than the buying at current price levels, or that buyers took advantage of the thin trading conditions last week to drive prices higher.
If the rally continues then the next upside target is the July 14, 2015 main top at $62.02.
If a short-term range forms between $56.11 and $60.51 then look for a possible pullback into its retracement zone at $58.31 to $57.79 over the near-term.