Crude Oil Price Update – Strengthens Over $55.05, Weakens Under $54.62

U.S. West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening on Thursday. The market is being underpinned by OPEC-led production cuts that are designed to trim the global supply surplus and U.S. sanctions against Venezuelan exports. The rally is being fueled by additional cuts in output and exports by Saudi Arabia and the hope that U.S.-China negotiations end with a deal that ends the trade dispute. Another jump in crude imports from China is also supportive. Putting a lid on prices are concerns over rising U.S. production after yesterday’s weekly government report showed another rise in crude oil stocks.

At 13:00 GMT, April WTI crude oil is trading $54.73, up $0.42 or +0.77%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the closing price reversal top at $56.05 on February 4.

A trade through $56.05 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $51.62 will change the main trend to down.

The short-term range is $56.05 to $51.62. The market is currently trading on the strong side of its retracement zone at $54.36 to $53.84. This range is new support.

Daily Technical Forecast

Based on the early price action, the direction of the April WTI crude oil on Thursday is likely to be determined by a pair of Gann angles at $55.05 and $54.62.

Bullish Scenario

Holding above $54.62 will indicate the presence of buyers, but taking out $55.05 will trigger the acceleration to the upside with the next target angle coming in at $55.55. This is the last potential resistance angle before the $56.05 main top.

Bearish Scenario

A sustained move under $55.05 will signal the presence of sellers. The trigger point for an acceleration to the downside is $54.62. If this angle fails then look for the selling to possibly extend into the retracement zone at $54.36 to $53.84.