Crude Oil Price Update – Strengthens Over $72.78, Weakens Under $71.38 but Buyers Likely to Come in on Dips

U.S. West Texas Intermediate crude oil futures are edging higher on Friday with support being driven by speculative buying fueled by uncertainty over whether Saudi Arabia and Russia will be able to produce enough oil to offset the expected shortfall from the loss of Iranian crude exports.

Traders have been focused on trading headlines related to the Iran sanctions all week. Earlier in the week, traders showed little reaction to the unexpected build in U.S. crude oil inventories.

At 0701 GMT, November WTI Crude Oil futures are trading $72.28, up $0.15 or +0.21%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $72.78 will signal a resumption of the uptrend. The main trend changes to down on a trade through $67.79.

The minor trend is also up. A move through $71.47 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is $69.98 to $72.78. Its 50% level or pivot at $71.38 is controlling the short-term direction of the market.

The next potential support is the major long-term Fibonacci level at $70.86.

The main range is $67.79 to $72.78.  Its retracement zone at $70.33 to $69.74 is another support zone.

With the main trend up, buyers are likely to step in on a test of any of these retracement levels.

Daily Swing Chart Technical Forecast

Based on this week’s price action, the direction of the November WTI Crude Oil futures contract today is likely to be determined by trader reaction to the pivot at $71.38.

A sustained move over $71.38 will indicate the presence of buyers. If they can generate enough upside momentum then look for a potential breakout over the top at $72.78.

A failure at $71.47 will change the minor trend to down. This could generate enough downside momentum to take out the short-term pivot at $71.38.

The selling pressure could pick up under $71.38 with the next target $70.86. This is a monthly chart Fibonacci level so I expect to see buyers come in to defend this support. If they fail to do so then look for the selling to extend into $70.33 to $69.74.

Since the main trend is up on the daily chart, look for buyers to step in on a break into $70.33 to $69.74. This area is a short-term value zone.