Crude Oil Price Update – Closing Price Reversal Top Confirmed; $57.31 – $56.91 Next Target Area

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Friday after posting a dramatic closing price reversal top the previous session. The abrupt end to a weather-driven rally and the subsequent lower close was fueled by worries that refineries will take time to resume operations after the big freeze in Texas, creating a gap in demand, while OPEC+ supplies were expected to rise.

At 11:15 GMT, April WTI crude oil is trading $59.30, down $1.23 or -2.03%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top and today’s subsequent confirmation of the chart pattern has shifted momentum to the downside.

A trade through $62.29 will negate the closing price reversal top and signal a resumption of the uptrend, while a move through $57.31 changes the main trend to down.

The minor range is $57.31 to $62.29. The market is currently trading on the weak side of its pivot at $59.80.

The short-term range is $51.53 to $62.29. If the main trend changes to down then look for the selling to continue into its retracement zone at $56.91 to $55.64.

Daily Swing Chart Technical Forecast

The direction of the April WTI crude oil market on Friday will be determined by trader reaction to the pivot at $59.80.

Bearish Scenario

A sustained move under $59.80 will indicate the presence of sellers. If this move creates enough downside momentum then look for a test of $57.31 to $56.91 over the short-run.

Bullish Scenario

A sustained move over $59.80 will signal the presence of buyers. If this generates enough upside momentum then look for the rally to possibly lead to a retest of $62.29, followed by $62.64 over the near-term.

However, since that high at $62.29 was a weather-driven high, we’re more likely to retrace 50% of the first break. That level is $60.45.

Side Notes

April WTI crude oil is also trading lower for the week. A close below $59.38 will form a weekly closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 week correction.

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