Crude Oil Price Update – Strengthens Over $56.98, Weakens Under $56.58

U.S. West Texas Intermediate crude oil futures are getting a boost shortly before the regular session opening by positive comments from the Saudi oil minister regarding a possible extension of the current production cuts. Today’s early strength suggests traders are shifting their focus back to supply issues after last week’s sell-off was fueled by rising concerns over demand.

At 09:37 GMT, May WTI crude oil is trading $56.82, up $0.39 or +0.69%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Friday when sellers took out the previous main bottom at $55.47. A trade through $58.26 will change the main trend to up. A move through $54.87 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $57.37 will change the minor trend to up. This will also shift momentum to the upside.

The main range is $52.16 to $58.26. Its retracement zone at $55.22 to $54.50 is support. This zone stopped the selling on Friday at $54.87.

The short-term range is $58.28 to $54.87. The market is currently testing its retracement zone at $56.58 to $56.98. Trader reaction to this zone will determine the near-term direction of the market.

Daily Technical Forecast

Based on the early price action, the direction of the May WTI crude oil market the rest of the session is likely to be determined by trader reaction to the 50% level at $56.58 and the Fibonacci level at $56.98.

Bullish Scenario

A sustained move over $56.98 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to take a run at the minor top at $57.37 and the downtrending Gann angle at $57.51. The latter is a potential trigger point for an acceleration into the next downtrending Gann angle at $57.89. This is the last potential resistance angle before the $58.26 main top.

Bearish Scenario

A sustained move under $%6.58 will signal the return of sellers. This could trigger a break into a short-term pivot at $56.00. This is the last potential support level before $55.22 and $54.87.