Crude Oil Price Update – Mid-Session Strength Tied to Position Squaring Ahead of Long Weekend

U.S. West Texas Intermediate crude oil futures are edging higher at the mid-session on Friday after taking out the previous session’s high. The move is likely technical in nature since the fundamentals this week have been largely on the bearish side. We could also be looking at position squaring ahead of the extended holiday weekend.

At 18:14 GMT, March WTI crude oil futures are trading $79.37, up $0.87 or +1.11%.

Helping to generate some of the upside momentum is the weaker U.S. Dollar. A decline in the greenback tends to drive up foreign demand for the dollar-denominated commodity.

Perhaps contributing to today’s limited gains are low holiday volume, and an uncertain demand outlook as more countries consider restrictions on Chinese travelers with COVID-19 infections spreading in the top-importing nation.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher.

A trade through $81.21 will change the main trend to up. A move through $70.56 will reaffirm the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $76.94 will change the minor trend to down.

The main range is $89.89 to $70.56. Its retracement zone at $80.23 to $82.51 is resistance. It stopped the rally at $81.21 on Tuesday.

The minor range is $73.49 to $81.21. Its pivot at $77.35 is support. The short-term range is $70.56 to $81.21. If the minor trend changes to down then its pivot at $75.89 will become the key support level.

Daily Swing Chart Technical Forecast

Trader reaction to $78.28 is likely to determine the direction of the March WTI crude oil market into the close on Friday.

Bullish Scenario

A sustained move over $78.29 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the short-term 50% level at $80.23. Sellers could come in on the first test of this level, but overcoming it could lead to a test of the main top at $81.21.

Bearish Scenario

A sustained move under $78.28 will signal the presence of sellers. This could trigger a late session break into $77.35, followed by the minor bottom at $76.94.

A failure to hold $76.94 will shift momentum to the downside with $75.89 the next target.