May WTI Crude Buyers Hoping to Fuel Breakout Over $101.32

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday after the International Energy Agency (IEA) issued a potentially bullish report on Russian crude oil supply. The market is also being supported by a weaker U.S. Dollar, which fell after the U.S. Federal Reserve raised its benchmark interest rate as expected.

At 12:21 GMT, May WTI crude oil futures are trading $99.04, up $5.45 or +5.82%. On Wednesday, the United States Oil Fund ETF (USO) settled at $68.20, down $0.43 or -0.63%.

According to the IEA, three million barrels a day (bpd) of Russian oil and products could be shut in from next month. The supply loss would be far greater than an expected drop in demand of one million bpd triggered by higher fuel prices.

The oil market largely shrugged off a decision by the U.S. Federal Reserve on Wednesday to raise interest rates by one-quarter of a percentage point, as anticipated.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $85.81 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $88.49 will change the minor trend to down. This will shift momentum.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is support. This area stopped the selling at $92.20 on March 15.

The first resistance zone is $101.32 to $106.12. The primary upside target, however, is the retracement zone at $109.31 to $113.35.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Thursday is likely to be determined by trader reaction to the main 50% level at $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. The first upside target is the Fibonacci level at $101.32.

Taking out $101.32 will indicate the buying is getting stronger with the next target area a pair of 50% levels at $106.12 – $109.31.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. Taking out the low at $92.20 will indicate the selling is getting stronger. This could trigger a break into the Fibonacci level at $86.52, which is the last support before the $85.81 main bottom.