Crude Oil Price Update – Strengthens Over $48.00, Weakens Under $47.18

U.S. West Texas Intermediate crude oil futures are trading slightly better early Tuesday after posting a potentially bearish closing price reversal top the previous session. If confirmed the move could trigger the start of a 2 to 3 day correction.

The early price action suggests investor indecision as the deadlocked talks between major oil producers about potential changes in February output are set to continue later in the day while fuel demand concerns lingered amid new COVID-19 lockdowns.

At 07:32 GMT, February WTI crude oil futures are trading $47.67, up $0.05 or +0.11%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside.

A trade through yesterday’s low at $47.18 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction. A move through $49.83 will negate the chart pattern and signal a resumption of the uptrend.

The main trend will change to down on a trade through the last swing bottom at $46.16.

The minor trend is down. It changed to down on a trade through $47.50. This shifted the momentum to the downside.

The minor range is $46.16 to $49.83. Its 50% level at $48.00 is early resistance.

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

Daily Swing Chart Technical Forecast

The early price action indicates the direction of the crude oil market on Tuesday will be determined by trader reaction to the pivot at $48.00 and yesterday’s low at $47.18.

Bullish Scenario

A sustained move over $48.00 will indicate the presence of buyers. If this move can create enough upside momentum then look for a rally into a minor 50% level at $48.51. Overcoming this level could trigger a surge into $49.83. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $47.18 will signal the presence of sellers. Not only will this move confirm the closing price reversal top, but it could also trigger a break into the main bottom at $46.16, followed by the Fibonacci level at $46.04. The latter is a potential trigger point for an acceleration to the downside.

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