May WTI Oil Buyers Defending $94.14 – $86.52 Retrace Zone

U.S. West Texas Intermediate crude oil is edging lower on Friday as it heads to a second straight weekly loss after countries announced plans to release crude from their strategic stocks. A stronger U.S. Dollar also weighed on demand for dollar-denominated crude oil.

At 12:36 GMT, May WTI crude oil futures are trading $96.57, up $0.54 or +0.56%. On Thursday, the United States Oil Fund ETF (USO) settled at $73.11, up $0.06 or +0.08%.

The International Energy Agency (IEA) has listed members’ contributions to a 120-million-barrel release of crude and oil products from emergency stockpiles aimed at cooling global oil prices following Russia’s invasion of Ukraine.

The release of stocks by the U.S.-allied members of the IEA – which made up of 31 mostly industrialized countries, but does not include Russia – would be their second coordinated release in a month and the fifth in the agency’s history.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $93.81 will signal a resumption of the downtrend. The main trend will change to up on a move through the nearest main top at $105.59.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is major support. It stopped the selling at $92.20 on March 15. The zone is also controlling the longer-term direction of the market.

On the upside, the first resistance is the intermediate retracement zone at $101.32 to $106.12. The second resistance zone comes in at $109.31 to $113.35.

Daily Swing Chart Technical Forecast

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

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the Fibonacci level at $101.32. Overcoming this level could trigger an even stronger move into the main top at $105.59, followed by the 50% level at $106.12.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. Taking out yesterday’s low at $93.81 will indicate the selling is getting stronger.

Trader reaction to the March main bottom at $92.20 could set the tone next week. A trade through this level could trigger an acceleration into the main Fibonacci level at $86.52.