Crude Oil Price Update – Slowly Grinding to $53.60 Main Top or Weakening Upside Momentum?

U.S. West Texas Intermediate crude oil prices continued to grind higher on Thursday. Today’s strength wasn’t driven by fresh news, but follow-through buying related to the news from earlier in the week that Saudi Arabia, the world’s biggest exporter, unilaterally agreed to cut output over the next two months and a government report that showed U.S. crude stockpile had fallen more than expected.

At 21:31 GMT, February WTI crude oil is at $50.94, up $0.31 or +0.61%.

Traders also said reports saying President-elect Joe Biden’s administration will clamp down on U.S. oil production may have also underpinned prices, but this news may have been offset by a rise in the U.S. Dollar, which could’ve resumed foreign demand for dollar-denominated crude oil.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out the previous high at $50.94. A trade through $47.18 will change the main trend to down.

The minor range is $47.18 to $51.28. Its 50% level at $49.23 is potential support. The short-term range is $46.16 to $51.28. Its 50% level at $48.72 is more important support.

The major support is the long-term Fibonacci level at $46.04.

Short-Term Outlook

Although the trend continued to move higher on Thursday, the gain from high to high was not that impressive. From Tuesday to Wednesday, the gain from high to high was $0.74. From Wednesday to Thursday, the gain from high to high was $0.34.

This may be the first sign of slowing momentum. It’s not a reversal top. It’s not a change in trend either, but it could be an early sign that the buying is starting to weaken. This could be a sign that the market is ripe for a short-term correction.

If the market continues to move higher either by price spike or a grind then look for an eventual test of its February 20, 2020 main top at $53.60.

For a look at all of today’s economic events, check out our economic calendar.