Crude Oil Price Update – Strengthens Over $22.97, Weakens Under $19.83

U.S. West Texas Intermediate crude oil futures edged higher again on Tuesday on hopes for a recovery in vehicle traffic and fuel demand as some European and Asian countries along with several U.S. states began to ease coronavirus lockdown measures.

Swiss bank UBS said the easing of restrictions would help lead to a balance in supply and demand for the oil market in the third quarter and even projected an undersupply by the fourth, forecasting an end-2020 recovery of Brent to $43 per barrel and $55/bbl by mid-2021.

At 11:40 GMT, June WTI crude oil is trading $22.45, up $2.06 or +10.15%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through $33.15. A move through $6.50 will signal a resumption of the downtrend.

The short-term range is $33.15 to $6.50. Its retracement zone at $19.83 to $22.97 is currently being tested. This zone is controlling the momentum. Although the market is up 10 days from its recent bottom, all the buying has been short-covering. Overtaking this zone will shift momentum to the upside.

The main range is $48.92 to $6.50. Its retracement zone at $27.71 to $32.72 is the primary upside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $22.45, the direction of the June WTI crude oil futures contract the rest of the session on Tuesday is likely to be determined by trader reaction to the Fibonacci level at $22.97.

Bullish Scenario

A sustained move over $22.97 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible acceleration into the main 50% level at $27.71 over the near-term.

Bearish Scenario

The inability to overcome $22.97 will signal the return of sellers. This could lead to a retest of the 50% level at $19.83. If this fails then we could see a pullback into at least $15.00.