Crude Oil Price Update – Reversing to Upside after Earlier Losses

September West Texas Intermediate crude oil futures are trading slightly higher after recovering from early session weakness. The price action suggests investors are waiting for news from the OPEC/Non-OPEC oil ministers meeting in St. Petersburg, Russia. There is speculation that the Saudi’s will cap crude exports next month, or the oil ministers will agree to limit production from Libya and Nigerian.

Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top on July 20 at $47.74. Taking out this price will negate the chart pattern and signal a resumption of the uptrend.

The direction of the market is also being controlled by retracement zones.

On the upside, the major retracement zone at $47.33 to $48.52 stopped the rally last week at $47.74.

The short-term retracement zone at $45.79 to $45.32 is currently being tested. The next retracement zone target is $45.01 to $44.36.

Finally, a trade through $43.83 will change the main trend to down.

Forecast

Based on the current price at $46.04 and the earlier price action, the direction of the crude oil market the rest of the session will be determined by trader reaction to an uptrending angle at $46.33.

A sustained move over $46.33 will indicate the buying is getting stronger. The daily chart indicates there is plenty of room to the upside with potential targets coming in at $47.33 and $47.37.

The inability to overtake $46.33 will signal the presence of sellers. This could drive the market into a series of potential support levels at $45.79 and $45.32, followed by a cluster of numbers at $45.08, $45.02 and $45.01.

We’re in a news driven market today so don’t be surprised by sudden volatility.