Crude Oil Price Update – Rally Extends Over $66.00, Could Weaken Under $65.45

U.S. West Texas Intermediate crude oil futures closed slightly lower on Friday in a lackluster trade. The market was underpinned by optimism about a demand recovery as the U.S. vaccine rollout picked up pace. Longer-term, production cuts by OPEC and its allies continue to provide steady upside pressure. Perhaps putting a lid on prices was the stronger U.S. Dollar, which may have weighed on foreign demand for the dollar-denominated commodity.

On Friday, May WTI crude oil settled at $65.64, down $0.36 or -0.55%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $67.79 will signal a resumption of the uptrend. A trade through $63.10 will change the main trend to down.

The minor range is $67.79 to $63.10. Its retracement zone at $65.43 to $66.00 is currently being tested.

The short-term range is $59.08 to $67.79. Its retracement zone at $63.44 to $62.41 stopped the selling at $63.10 on March 10.

Short-Term Outlook

The direction of the May WTI crude oil market early Monday is likely to be determined by trader reaction to $65.45 to $66.00.

Bullish Scenario

A sustained move over $66.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into $67.79.

Bearish Scenario

A sustained move under $65.45 will signal the presence of aggressive counter-trend sellers. They are trying to form a potentially bearish secondary lower top.

If they’re able to generate enough upside momentum on the move then look for possible retest of the $63.44 to $62.41 retracement zone.

Buyers could come in on the first test of this area. They will be trying to defend the trend, which will change to down if $63.10 fails as support.

The lower or Fibonacci level at $62.41 is a potential trigger point for an acceleration to the downside with $59.08 the next likely downside target.

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