Oil Price Fundamental Daily Forecast – Rally Spurred by Speculation Fed May Act Less Aggressively

U.S. West Texas Intermediate crude oil futures gained over 1% on Friday following better-than-expected U.S. employment data. However, the benchmark prices still fell more than 3% during the week amid concerns of further interest rate hikes in the U.S. and Europe.

On Friday, June WTI Crude Oil settled at $76.80, up $0.92 or +1.21%. The United States Oil Fund ETF (USO) finished at $67.14, up $0.90 or +1.36%.

U.S. Employment Data Better-than-Expected

The U.S. Federal Reserve may not need to raise interest rates as much as previously expected, after a government report showed signs of easing inflation and normalization of the labor market.

Fed Chair Jerome Powell had warned of higher rate hikes and the bank’s next monetary policy meeting is scheduled for March 21-22.

A strengthening dollar is also making oil more expensive for holders of other currencies.

On the supply side, major oil producers Saudi Arabia and Iran re-established ties, and the United States urged traders to shed concerns about shipping price-capped Russian oil to shore up supply.

Meanwhile, President Joe Biden proposed a budget that would scrap oil and gas industry subsidies. Money managers also reduced their net long U.S. crude futures and options positions.

Finally, Baker Hughes reported the number of U.S. oil rigs fell by 2 to 590 the week-ending March 10, their lowest since Jun.

Daily June WTI Crude Oil Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $74.17 will change the main trend to down. A move through $80.97 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $78.18 will change the minor trend to up.

June WTI Crude Oil futures settled on the strong side of a minor pivot at $76.71, making it support. The major support is a long-term Fibonacci level at $73.05.

On the upside, potential resistance levels are layered at $77.52, $78.29 and $78.83. The latter is a potential trigger point for an acceleration to the upside.

Daily June Crude Oil Technical Forecast

Trader reaction to the Fibonacci level at $76.71 is likely to determine the direction of the June WTI Crude Oil market early Monday.

Bullish Scenario

A sustained move over $76.71 will indicate the presence of buyers. If this generates enough upside momentum then look for a labored rally with $77.52 the first target, followed by a resistance cluster at $78.18 – $78.29, and another 50% level at $78.83.

Bearish Scenario

A sustained move under $76.71 will signal the presence of sellers. This could lead to a retest of $74.96, followed by the main bottom at $74.17. A trade through this level will change the main trend to down and likely fuel an extension of the selling into a support cluster at $73.03 – $73.05.