Crude Oil Price Update – Trade Through $22.94 Confirms Closing Price Reversal Top

U.S. West Texas Intermediate crude oil futures are trading marginally higher on Friday as traders sit on their hands ahead of Friday’s U.S. Non-Farm Payrolls report.

Oil prices posted a dramatic technical closing price reversal top on Thursday as global supply and demand worries erased gains seen from an increase in Saudi Arabia’s official crude selling price and a surprise rise in Chinese exports last month.

At 11:22 GMT, June WTI crude oil is trading $23.75, up $0.20 or +0.85%.

“The Saudi (price news) was supportive early in the day, but we still have significant headwinds in terms of the economy, demand and storage,” John Kilduff, partner at Again Capital LLC in New York said.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $33.15 will change the main trend to up. A move through $6.50 will signal a resumption of the downtrend.

On Thursday, the market formed a potentially bearish closing price reversal top. A trade through $26.74 will negate the chart pattern and indicate the buying is getting stronger.

A move through $22.94 will confirm the chart pattern. This could trigger the start of a 2 to 3 day sell-off.

The intermediate range is $48.92 to $6.50. Its retracement zone at $27.71 to $32.72 is the next upside target. This is potential resistance.

The short-term retracement zone at $22.97 to $19.83 is potential support. The minor 50% level at $16.62 is the primary downside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $23.75, the direction of the June WTI crude oil market the rest of the session on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at $22.97.

Bullish Scenario

A sustained move over $22.97 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible rally into $26.74, followed by $27.71. The latter is a potential trigger point for an acceleration to the upside with the next major near-term target $32.72 to $33.15.

Bearish Scenario

A sustained move under $22.97 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with the first target $19.83. If this fails then the selling is likely to extend into the next 50% level at $16.62.