Crude Oil Price Update – Testing Retracement Zone; Strengthens Over $59.58, Weakens Under $57.64The direction of the May WTI crude oil market on Thursday is likely to be determined by trader reaction to the main 50% level at $59.58.
U.S. West Texas Intermediate crude oil futures are edging lower early Thursday while testing the key retracement zone that could determine its next major move. Fundamentally, gains are being capped and prices pressured by concerns over growing gasoline supplies and weakening demand for crude oil.
At 06:43 GMT, May WTI crude oil is trading $59.21, down $0.56 or -0.94%.
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On Wednesday, government figures showed a big increase in U.S. gasoline stocks, causing concerns about demand for crude weakening in the world’s biggest consumer of the resource at a time when supplies around the world are rising. At the same time, supply is rising across the globe with Russian output increasing from average March levels in the first few days of April, traders said.
Despite the negative news, there seems to be enough buyers betting on higher economic growth to boost demand for oil and its products, while helping to reduce stockpiles.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $57.25 will signal a resumption of the downtrend. The main trend will change to up on a trade through $66.44. Taking out $57.63 will make $62.27 a new main top.
The minor trend is also down. The minor trend will change to up on a trade through $62.27. This will also shift momentum to the upside.
The main range is $51.37 to $67.79. The market is currently testing its retracement zone at $59.58 to $57.64. This zone is controlling the near-term direction of the market.
The minor range is $66.44 to $57.25. Its 50% level at $61.85 is the first resistance level. This is followed by the primary resistance area at $62.52 to $63.76.
Daily Swing Chart Technical Forecast
The direction of the May WTI crude oil market on Thursday is likely to be determined by trader reaction to the main 50% level at $59.58.
A sustained move under $59.58 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main Fibonacci level at $57.64, followed by a minor bottom at $57.63 and a pair of main bottoms at $57.25 and $57.06. The latter is a potential trigger point for an acceleration to the downside.
A sustained move over $59.58 will signal the presence of buyers. The first upside target is a minor pivot over $59.95. Sellers could come in on the first test of this level.
Overtaking $59.95 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge $61.75, $61.85 and $62.27.
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