Crude Oil Update – Prices Firm Ahead of OPEC Compliance Meeting

Short-covering ahead of this weekend’s meeting of the world’s top oil producers in Vienna is helping to drive March crude oil prices higher early Friday. The purpose of the meeting is to assess compliance with the OPEC/non-OPEC plan to cut production. The rally is expected to be limited, however, as investors continue to react to increased U.S. production.

Technical Analysis

The main trend is down according to the daily swing chart. The main trend will turn up on a trade through $54.32. A move through $51.59 will signal a resumption of the downtrend. ‘

On the downside, the major retracement zone is $51.43 to $50.29. On the upside, the major target zone is $53.89 to $54.43.

The short-term range is $51.59 to $54.32. Its retracement zone is $52.96 to $52.63. This zone is currently being tested.

Forecast

Based on the current price at $52.82, the direction of the March crude oil market today is likely to be determined by trader reaction to $52.96 and $52.63. Look for a sideways, rangebound trade if the market remains between this levels.

A sustained move over $52.96 will signal the presence of buyers. This could drive the market into the downtrending angle at $53.18. This angle has been guiding the market lower since January 3.

This angle is also the trigger point for an acceleration to the upside with the next target the 50% level at $53.89.

A sustained move under $52.63 will indicate the presence of sellers. This could lead to a quick break into the uptrending angle at $52.47. This is followed by another uptrending angle at $52.02. This is the last potential support angle before the low at $51.72 and the main bottom at $51.59.