Crude Oil Price Update – Weakens Under $60.02 but Low Volume May Dampen Selling Pressure

U.S. West Texas Intermediate crude oil futures finished slightly better on Monday after recovering from early session weakness. Prices were pressured early as Russia said an OPEC-led producer group may consider easing output cuts next year.

The market edged higher late in the day in thin pre-Christmas trading after Russia’s energy minister said cooperation with OPEC to support the market would continue and as analysts forecast a second weekly decline in U.S. crude inventories.

On Monday, February WTI crude oil futures settled at $60.52, up $0.08 or +0.13%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $61.40 will signal a resumption of the uptrend. The main trend will change to down on a move through $54.75. This is highly unlikely, however, there is room for a normal 50% retracement.

The market is currently trading inside a major retracement zone, identified as $58.91 to $62.05. This zone is controlling the longer-term direction of the market.

The next major retracement zone at $58.66 to $57.06 is support.

The short-term range is $54.75 to $61.40. Its 50% level comes in at $58.08.

Combining the two major retracement zones creates a potential support cluster at $58.91 to $58.66. This area is the best downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

Daily Swing Chart Technical Forecast

There is no trigger point in the market today. The move will be determined by intraday momentum.

If intraday momentum shifts to the upside, buyers may make a run at the minor top at $61.40. Taking it out could drive the market into the major Fibonacci level at $62.05.

If intraday momentum shifts to the downside then look for sellers to try to run stops under last Friday’s low at $60.02. Taking out this level will indicate the selling pressure is getting stronger. This could trigger the start of a near-term break into the potential support cluster at $58.91 to $58.66.