Crude Oil Price Update -Needs to Hold $46.04 to Sustain Long-Term Strength

U.S. West Texas Intermediate crude oil futures are trading lower late in the session on Friday. The market is posting an inside move, which usually indicates investor indecision and impending volatility, as demand worries due to new coronavirus-related restrictions on business in New York overshadowed progress toward vaccination programs.

At 20:01 GMT, February WTI crude oil is trading $46.77, down $0.19 or -0.40%.

“Restrictions in New York are weighing on prices,” said Bob Yawger, director of energy futures for Mizuho in New York. On Thursday, funds had placed net long bets as Brent topped $50 a barrel. “As we approach the close, the speculator community is reluctant to go home with a net long position,” he said.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $47.88 will reaffirm the uptrend. The main trend will change to down on a move through $45.14.

The market is currently trading on the strong side of a major retracement zone at $46.04 to $42.45. Trader reaction to this area will determine the near-term direction of the market.

Short-Term Outlook

February WTI crude oil futures are currently trading on the bullish side of a long-term retracement zone. Over the short-term, its direction will be determined by trader reaction to the long-term Fibonacci level at $46.04.

Bullish Scenario

A sustained move over $46.04 will indicate the presence of buyers. This could lead to a retest of $47.88. Taking out this level could trigger a surge into the March 3 top at $49.07.

Bearish Scenario

A sustained move under $46.04 will signal the presence of sellers. This could trigger a move into $45.14. Taking out this main bottom will change the main trend to down. This could create the downside momentum needed to challenge another main bottom at $44.10 and a major 50% level at $42.45.