Crude Oil Price Update – Main Trend Down; Pivot at $62.36 Nearest Resistance, Followed by $63.04 – $64.16

U.S. West Texas Intermediate crude oil futures are edging lower early Tuesday on increasing concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in fuel demand and as producers cut prices, indicating ample oil supply.

At 05:01 GMT, May WTI crude oil futures are trading $60.93, down $0.63 or -1.02%.

Later today at 20:30 GMT, the American Petroleum Institute (API) will report its latest data on U.S. crude stockpiles. The report is expected to show U.S. crude inventories fell by about 900,000 barrels in the week to March 19 while refinery utilization rose by 3.2 percentage points, according to a Reuters poll.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $58.28 will signal a resumption of the downtrend. The main trend will change to up on a move through $66.44.

The main range is $51.37 to $67.79. Its retracement zone at $59.58 to $57.64 is potential support. This zone stopped the selling at $58.28 on March 18.

The minor range is $66.44 to $58.28. Its 50% level at $62.36 is the first potential upside target.

The short-term range is $67.79 to $58.28. Its retracement zone at $63.04 to $64.16 is the primary upside target.

Daily Swing Chart Technical Forecast

Like we wrote in yesterday’s analysis, the market is currently trapped inside a pair of retracement zones with momentum driving the price action.

Bullish Scenario

A sustained move to the upside could lead to a test of a series of retracement levels at $62.36, $63.04 and $64.16. Since the main trend is down, sellers could return on a test of any of these levels. They are going to try to form another secondary lower top. It’s hard to get excited about the upside until buyers can take out $64.16 with conviction.

Bearish Scenario

On the downside, the nearest target area is $59.58 to $57.64. Counter-trend buyers came in before on a test of this level, and they can come in again, but a failure to hold $57.64 could trigger the start of a steep sell-off with the February 1 bottom at $51.37 the next likely downside target.

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