Crude Oil Price Update – Sustained Move Over $59.21 Will Be Bullish

January West Texas Intermediate crude oil futures finished Friday’s session on a high note, hitting its highest level since August 31, 2015. The close indicates the momentum may be strong enough to continue the rally.

Fundamentally, the rally is being driven by issues with a Canadian pipeline located in the United States. The closure of the 590,000 barrels per day (bpd) Keystone pipeline following a spill last week helped drive up U.S. WTI crude oil prices.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. After a short-term set-back, the rally resumed late last week when buyers took out the previous main top at $58.14. This price is new minor support. A trade under it will indicate the selling is greater than the buying at current price levels.

The main trend will change to down on a trade through $55.00.

Daily Swing Chart Forecast

The first upside target on Monday is the August 31, 2015 main top at $59.21. A sustained move over this level could create the upside momentum needed to challenge the July 14, 2015 main top at $61.88.

The catalysts for a rally this week will be further bullish developments over the pipeline issue and an extension of the program to cut production at the OPEC meeting on November 30. The most bullish news would be an extension combined with an even bigger cut in output.