Crude Oil Price Update – Strong Upside Momentum Could Trigger Surge into $81.37 – $81.71
U.S. West Texas Intermediate crude oil futures closed higher on Friday after hitting its highest level since 2014 early in the session. The catalysts behind the rally were signs some industries have begun switching fuel from high priced gas to oil and on doubts the U.S. government would release oil from its strategic reserves for now.
On Friday, December WTI crude oil futures settled at $78.76, up $0.80 or +1.03%.
The switching from gas to oil could be the game changer that eventually drives crude oil prices to $100 per barrel. No one figured this into their demand models.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $79.62 will signal a resumption of the uptrend. A move through $74.67 will change the main trend to down.
The first minor range is $74.67 to $79.62. Its 50% level or pivot at $77.15 is potential support.
The second minor range is $72.82 to $79.62. Its 50% level at $76.22 is another potential support price.
The short-term range is $69.05 to $79.62. If the main trend changes to down then its retracement zone at $74.34 to $73.09 will become the primary downside target.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil futures contract on Monday is likely to be determined by trader reaction to $78.76.
A sustained move over $78.76 will indicate the presence of buyers. The first upside target is $79.62.
Taking out $79.62 will indicate the buying is getting stronger. This could trigger an acceleration into a pair of historical tops at $81.37 and $81.71.
A sustained move under $78.76 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the pair of pivots at $77.15 and $76.22.
Since the main trend is up, buyers are likely to come in on a test of $77.15 to $76.22. If $76.22 fails then look for the selling to possibly extend into $74.67, followed closely by $74.34.
Taking out $79.62 then closing lower for the session will form a closing price reversal top. This won’t change the trend to down, but if confirmed, it could trigger the start of a 2 to 3 correction.