Crude Oil Price Update – Pressure Under $71.39 Targets $68.98, Followed by $67.44 – $66.17 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading lower on Friday as surging cases of the Omicron coronavirus variant raised fears of demand destruction. Today’s weakness puts the market in a position to end post a weekly loss, its seventh in eight weeks.

At 11:52 GMT, March WTI crude oil futures are trading $70.51, down $1.24 or -1.73%. This puts it on track for at least a 1.4% loss for the week. On Thursday, the United States Oil Fund settled at $51.87, up $0.25 or +0.48%.

In the U.S., the rapid spread of the Omicron variant has led some companies to pause plans to get workers back into offices. These new curbs are raising fears of lower fuel demand. Oil prices have also been pressured this week on forecasts calling for increased supply from U.S. producers.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $72.82 will change the main trend to up. A move through $68.98 will signal a resumption of the uptrend.

The minor trend is also down. A trade through $72.31 will change the minor trend to up. This will shift momentum to the upside.

The main range is $80.72 to $62.05. Its retracement zone at $71.39 to $73.59 is resistance. This area is controlling the near-term direction of the market. It stopped the buying at $72.82 on December 9.

The minor range is $72.82 to $68.98. The market is currently trading on the weak side of its pivot at $70.90, making it resistance.

The short-term range is $62.05 to $72.82. Its retracement zone at $67.44 to $66.17 is the nearest downside target area.

Daily Swing Chart Technical Forecast

The direction of the March WTI crude oil futures contract on Friday is likely to be determined by trader reaction to $70.90 and $71.39.

Bearish Scenario

A sustained move under $70.90 will indicate the presence of sellers. The first target is $70.64, followed by the minor bottom at $68.98.

Taking out $68.98 will resume the downtrend with $67.44 – $66.17 the next likely target area.

Bullish Scenario

A sustained move over $71.39 will signal the presence of buyers. This could lead to a labored rally with potential resistance a series of minor and main tops at $72.31, $72.55 and $72.82. The main resistance is the Fibonacci level at $73.59. This is also a trigger point for an acceleration to the upside.