Crude Oil Price Update – Buyers Motivated by Fears Over Future Oil Supply Shortages

U.S. West Texas Intermediate crude oil futures closed higher in Monday’s abbreviated trading session. Volume was on the light side due to a U.S. bank holiday, nonetheless, professionals saw enough opportunity in the limited electronic session to drive the market higher by over 1%.

The catalysts drawing the attention of buyers was optimism over Chinese demand, continued production curbs by major producers and Russia’s plans to rein in supply.

On Monday, April WTI crude oil futures settled at $77.41, up $0.86 or +1.12%. On Friday, the United States Oil Fund ETF (USO) finished at $67.07, down $1.38 or -2.02%.

Goldman Sachs Puts $100 a Barrel Crude on the Radar

Future oil supply shortages are likely to drive prices toward $100 a barrel by the end of the year, Goldman Sachs analysts said in a Feb. 19 note.

Prices will move higher “as the market pivots back to deficit with underinvestment, shale constraints and OPEC discipline ensuring supply does not meet demand”, they wrote.

Daily April WTI Crude Oil Technical Analysis

The main trend is down according to the daily swing chart. A trade through $75.32 will signal a resumption of the trend. A move through $80.78 will change the main trend to up.

The minor trend is also down. A trade through $79.76 will change the minor trend to up. This will shift momentum to the upside.

The minor range is $72.64 to $80.78. Its pivot at $76.76 is support. The short-term range is $82.89 to $72.64. Its 50% level at $77.77 is potential resistance. The major resistance zone is $79.76 to $81.85.

Daily April WTI Crude Oil Technical Forecast

Trader reaction to $77.77 and $76.76 is likely to determine the direction of the April WTI crude oil market early Tuesday.

Bullish Scenario

A sustained move over $77.77 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the resistance cluster at $79.76.

Bearish Scenario

A sustained move under $79.76 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into last week’s low at $75.32.