Crude Oil Update – Buyers Are Waiting for Additional Bullish News

May West Texas Intermediate crude oil futures are trading lower after an early session rally failed to gain traction. Helping to pressure the market are concerns over the growing U.S. supply.

The support is coming from supply disruptions in Libya and growing optimism that the OPEC-led output cut by major producing countries would be extended beyond the June deadline. Additionally, imports dropped and exports rose, according to the U.S. Energy Information Administration.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through $50.14 will turn the main trend to up.

Forecast

Based on the current price at $49.48, the first upside target is an uptrending angle at $50.01. The nearest downside target is a price cluster at $48.58 to $48.51.

Overcoming the angle at $50.01 will put the market in a bullish position. This could create enough upside momentum to challenge the main top at $50.14 and the major Fibonacci level at $50.26.

If buyers can take out the Fib level at $50.26 with conviction then look for an acceleration to the upside with the next targets a pair of 50% levels at $51.52 and $51.64.

Simply stated, if the buying isn’t strong enough to overtake $50.01 then the market is likely to retreat back to $48.58 to $48.51.