Crude Oil Price Update -Trying to Cross to Strong Side of Short-Term 50% Level

U.S. West Texas Intermediate (WTI) crude oil futures are trading flat to lower at the mid-session after clawing back earlier losses. The market was under pressure from the opening on Monday as traders reacted to rising tensions between the United States and China that could put additional pressure on the already stressed global economy.

At 15:21 GMT, June WTI crude oil futures are trading $19.70, down $0.08 or -0.40%.

Reuters is reporting that hedge funds and other money managers bought petroleum derivatives last week in the cautious hope the industry may have passed the worst point of the coronavirus-induced lockdowns.

Money managers purchased the equivalent of 41 million barrels in the six most important petroleum futures and options contracts in the week-ending on April 28, exchange and regulatory records showed.

Purchases were down from 122 million barrels the previous week, but funds have now been buyers for five weeks running, with total purchases reaching 246 million barrels.

Daily Swing Chart Technical Analysis

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

The short-term range is $33.15 to $6.50. Its retracement zone at $19.83 to $22.97 is currently being tested. Since the trend is down, sellers could come in on the first test of this zone. Overtaking this area will shift momentum to the upside.

The main range is $48.92 to $6.50. Its retracement zone at $27.71 to $32.72 is the primary upside target. Overtaking this zone will indicate the buying is getting stronger.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $19.70, the direction of the June WTI crude oil market the rest of the session on Monday will likely be determined by trader reaction to the short-term 50% level at $19.83.

Bearish Scenario

A sustained move under $19.83 will indicate the presence of sellers. If this move creates enough downside momentum then look for a possible retracement into the minor bottom at $10.07. This is the last potential support before the $6.50 main bottom.

Bullish Scenario

A sustained move over $19.83 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the short-term Fibonacci level at $22.97. This is a potential trigger point for an acceleration into the major 50% level at $27.71.