Crude Oil Price Update – Lower as Strong Dollar Weighs on Demand

U.S. West Texas Intermediate crude oil futures are edging lower on Monday, weighed down by higher yields and a firm U.S. Dollar. Traders are also saying that fears of a recession are also offsetting gains arising from Russia’s plans to increase the size of its production cuts.

At 04:51 GMT, April WTI crude oil is trading $76.10, down $0.22 or -0.29%. On Friday, the United States Oil Fund ETF (USO) settled at $67.10, up $0.72 or +1.08%.

Strong Dollar Tends to Weaken Foreign Demand

The U.S. Dollar is hovering just under a seven-week high early Monday. The market is riding the wave of a slew of strong U.S. economic reports that reinforced the notion that the Federal Reserve will have to raise interest rates further and for longer than previously anticipated.

A firm greenback tends to make dollar-denominated crude oil more expensive for foreign buyers.

Higher rates are also raising fears that the U.S. Federal Reserve may have to force a U.S. recession in order to slow down the economy, weaken the labor force and drive down inflation to its mandated 2% level.

Daily April WTI Crude Oil Technical Analysis

The main trend is down according to the daily swing chart. A trade through $80.78 will change the main trend to up. A move through $73.80 will signal a resumption of the downtrend.

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

The short-term range is $72.64 to $80.78. Its 50% level at $76.71 stopped the rally earlier today. This is followed by another 50% level at $77.77.

The minor range is $73.80 to $76.75. Its 50% level at $75.28 is potential support.

Daily April WTI Crude Oil Technical Forecast

Trader reaction to the 50% level at $76.71 is likely to determine the direction of the April WTI crude oil market on Monday.

Bearish Scenario

A sustained move under $76.71 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor pivot at $75.28.

Bullish Scenario

A sustained move over $76.71 will signal the presence of buyers. This could trigger an acceleration to the upside with $77.77 the next major upside target.