WTI Crude Bulls Eyeing Long-Term Fibonacci Level at $92.38

U.S. West Texas Intermediate crude oil futures finished higher on Monday boosted by a supply shortage and geopolitical concerns over Eastern Europe and the Middle East that could lead to supply disruptions. Additionally, traders are positioning themselves ahead of this week’s OPEC+ meeting.

On Monday, March WTI crude oil settled at $88.15, up $1.33 or +1.53%. The United States Oil Fund ETF (USO) finished at $62.46, up $0.49 or +0.79%.

Market analysts and Reuters sources widely expect OPEC+ to keep its policy of gradual production increases when it meets on Wednesday. OPEC and its allies have raised their output by 400,000 barrels per day every month since August.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $88.84 will signal a resumption of the uptrend. A move through $81.90 will change the main trend to down.

The minor range is $81.90 to $88.84. Its 50% level at $85.37 is the nearest support.

The next support is a pair of 50% levels at $83.09 and $81.43. The latter is a potential trigger point for an acceleration to the downside.

Short-Term Outlook

The direction of the March WTI crude oil futures contract early Tuesday is likely to be determined by trader reaction to $87.64.

Bullish Scenario

A sustained move over $87.64 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of last week’s high at $88.84. Taking out this level could generate the upside momentum needed to challenge the long-term Fibonacci level at $92.38.

Bearish Scenario

A sustained move under $87.64 will signal the presence of sellers. If this move generates enough downside momentum then look for the move to possibly extend into a pivot at $85.37.

Buyers could come in on the first test of $85.37, but if it fails then look for the selling to possibly extend into a second pivot at $83.09, followed by a main bottom at $81.90 and another pivot at $81.43. Look for the start of a steep decline if the last pivot fails as support.