Crude Oil Price Update – Poised to Challenge $109.77 – $110.07 Resistance Early Monday

U.S. West Texas Intermediate crude oil futures moved sharply higher on Friday, turning the market higher for the week as fears of supply shortage outweighed concerns about a slowdown in global economic growth. Soaring gasoline prices were also a contributing factor to the jump in crude oil prices. Gasoline futures soared to record highs earlier in the session.

On Friday, July WTI crude oil futures settled at $108.63, up $4.23 or +4.05%. The United States Oil Fund ETF (USO) finished at $81.29, up $2.06 or +2.60%.

Worries about supply in global crude oil markets have increased following a reduction in flows of Russian refined products such as diesel, fuel oil and naphtha.

Meanwhile U.S. gasoline prices are also soaring on shortage fears as the U.S. continues to ship huge supplies of refined products to Europe. Traders believe prices could surge even higher as the country prepares for the start of the summer driving season.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.77 will signal a resumption of the uptrend. A trade through the next main top at $110.07 will reaffirm the trend. Taking out $96.93 will change the main trend to down.

The market is currently being supported by a series of retracement levels at $105.77, $102.48, $100.96 and $98.88.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil futures contract on Monday will be determined by trader reaction to $105.77.

Bullish Scenario

A sustained move over $105.77 will indicate the presence of buyers. It this creates enough upside momentum then look for the market to take a run at the main top at $109.77.

Taking out the main tops at $109.77 and $110.07 will reaffirm the uptrend. This could trigger an acceleration into the March 7 main top at $116.43.

Bearish Scenario

A sustained move under $105.77 will signal the presence of sellers. This could trigger a sharp break into $102.48, followed by a retracement zone at $100.98 to $98.88. The latter is the last potential support before the $96.93 main bottom.

Side Notes

Basically, the chart pattern indicates the market has to hold the retracement zone at $105.77 to $102.48 to sustain the upside momentum.