Crude Oil Price Update – Next Trigger Point for Acceleration to Upside is $53.94 Main TopLook for a bullish tone over the near-term as long as March WTI crude oil futures can sustain a rally over the pivot at $52.69.
U.S. West Texas Intermediate is trading sharply higher late Monday, buoyed by falling U.S. crude inventories and rising winter fuel demand as one of the worst snowstorms in years hits the U.S. Northeast.
The U.S. Energy Information Administration (EIA) report, released last week, showed a 2.3 million-barrel drawdown in stockpiles at the Cushing, Oklahoma, futures delivery hub. Another 2.3 million-barrel weekly decline is expected since then, analysts and traders said citing a Wood Mackenzie report.
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At 20:19 GMT, March WTI crude oil is trading $53.69, up $1.49 or +2.85%.
In other news, the U.S. Northeast has been hit by a powerful winter snow storm, pummeling a vast swath stretching from Pennsylvania through New England, causing widespread disruption in New York City and other major urban centers in the region.
Additionally, Goldman Sachs said prices could rise to $65 by July, forecasting an oil market deficit of 900,000 barrels per day (bpd) in the first half of 2021, a higher level than its previous prediction of 500,000 bpd.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend resumed on Monday when buyers took out the previous main top at $53.58. A move through $53.94 will reaffirm the uptrend. The main trend will change to down on a trade through $51.44.
The minor range is $53.94 to $51.44. Late in the session, March WTI crude oil is trading on the strong side of its pivot at $52.69, putting it in a bullish position.
The second minor range is $47.31 to $53.94. Its 50% level at $50.63 is another potential support level followed by the short-term retracement zone at $50.12 to $49.22.
Look for a bullish tone over the near-term as long as March WTI crude oil futures can sustain a rally over the pivot at $52.69. If this move is able to create enough upside momentum then look for the market to continue to rally into the main top at $53.94.
The main top at $53.94 is also a potential trigger point for an acceleration to the upside. The daily chart shows there is plenty of room to the upside with the next potential target the January 8, 2020 main top at $57.41.
On the downside, a sustained move under $52.69 will indicate the presence of sellers. This could lead to more rangebound trading with support coming in at $51.64 to $51.44.