Crude Oil Price Update – Resistance at $73.13 – $73.43 Primary Upside Target; New Support $67.18 – $66.06

U.S. West Texas Intermediate crude oil futures are trading higher shortly after the New York opening on Tuesday as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased.

The market was also underpinned by the news of another stall in the Iran nuclear talks. Additionally, in another sign of confidence in oil demand, the world’s top exporter, Saudi Arabia, raised monthly crude prices on Sunday. Finally, China’s imports of crude oil rebounded in November from the previous month’s lows, but were still about 8% below the levels of a year earlier.

At 15:06 GMT, January WTI crude oil futures are trading $71.39, up $1.90 or +2.73%. The United States Oil Fund (USO) ETF is at $51.89, up $1.38 or +2.73%.

Later today at 21:30 GMT, the American Petroleum Institute (API) will release its weekly inventories data. It is expected to show U.S. crude inventories are likely to have fallen for a second straight week last week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the confirmation of the daily closing price reversal bottom on December 2.

A trade through $62.43 will negate the chart pattern and signal a resumption of the downtrend. The main trend will change to up on a trade through $79.23.

The short-term range is $79.23 to $62.43. The market is currently testing its retracement zone at $70.83 to $73.43.

The main range is $83.83 to $62.43. Its retracement zone at $73.13 to $75.66 is the next potential target zone.

The combination of these two zones forms a potential resistance cluster at $73.13 to $73.43. Since the main trend is down, sellers are likely to come in on a test of this area.

The new minor range is $62.43 to $71.93. Its retracement zone at $67.18 to $66.06 is the nearest potential support area.

Daily Swing Chart Technical Forecast

The direction of the January WTI crude oil market into the close on Tuesday is likely to be determined by trader reaction to $70.83.

Bullish Scenario

A sustained move over $70.83 will indicate the presence of buyers. Taking out the intraday high at $71.93 will indicate the buying is getting stronger. This could trigger a further rally into a series of retracement levels at $73.13, $73.43 and $75.66.

Sellers could come in on a test of these levels especially the $73.13 – $73.43 resistance cluster.

Bearish Scenario

A sustained move under $70.93 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at $67.18 to $66.06 over the near-term.