Crude Oil Price Update – Strong Counter-Trend Momentum Could Drive Market into $62.19 to $63.16

March West Texas Intermediate crude oil futures weakened early in the session, but a short-covering rally turned the market around at the mid-session. The rebound rally was fueled by government data which showed U.S. crude stocks rose less than expected and the Saudi energy minister signaled that oil producers will not prematurely end a deal to limit output.

According to the Energy Information Administration (EIA), U.S. crude inventories rose 1.8 million barrels last week, compared with expectations for an increase of 2.8 million barrels.

Additionally, refining rates fell as U.S. refiners reduced activity for seasonal maintenance. Gasoline inventories, however, rose 3.6 million barrels, more than expected.

Daily Swing Chart Analysis

The main trend is down according to the daily swing chart. A trade through $58.07 will signal a resumption of the downtrend. This could create enough downside momentum to challenge the December 14 main bottom at $56.07 and the December 7 main bottom at $55.93.

The minor trend is also down. A trade through $60.83 will change the minor trend to up. This will also shift momentum to the upside.

The main range is $56.07 to $66.66. Its retracement zone at $60.12 to $61.37 is acting like resistance. This zone is also controlling the near-term direction of the market.

The short-term range is $66.30 to $58.07. Its retracement zone at $62.19 to $63.16 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.

Daily Swing Chart Forecast

Based on the current price action, the direction of the crude oil market the rest of the session will be determined by trader reaction to the major Fibonacci level at $60.12.

Overtaking $60.12 and sustaining the move could create the momentum needed to challenge a series of retracement levels at $61.37, $62.19 and $63.16.

A sustained move under $60.12 will indicate the presence of sellers. This could drive the market back into the low at $58.07. This is the trigger point for a possible acceleration into $56.07 and $55.93.