Crude Oil Price Update – Strong Upside Momentum Ahead of API Inventories Data

U.S. West Texas Intermediate crude oil futures are soaring late Tuesday, shortly before the release of the American Petroleum Institute’s (API) weekly inventories report. The rally is being driven by recovering demand in China and easing concerns over Federal Reserve interest rate hikes.

At 21:00 GMT, April WTI crude oil futures are trading $77.54, up $3.07 or +4.12%. The United States Oil Fund ETF (USO) is at $67.76, up $2.26 or +3.45%.

Other factors contributing to the market’s strength are Saudi Arabia’s decision to raise prices for crude oil for Asian buyers for the first time in six months, and the shutdown of a pipeline in Turkey that moves 1-million-barrels-per-day (bpd) of crude oil.

In other news, today’s API inventories report, due to be released at 21:30 GMT, is expected to show a 2 million barrel crude oil build.

Daily April WTI Crude Oil Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher, following the confirmation of Monday’s closing price reversal bottom.

A trade through $72.64 signals a resumption of the downtrend. A move through the main tops at $82.69 and $82.89 will change the main trend to up.

The minor trend is also down. A trade through $78.28 will change the minor trend to up. This will confirm the shift in momentum.

The minor range is $82.89 to $72.64. Its 50% level at $77.77 is the first upside target.

The key resistance area is a retracement zone at $79.76 – $81.85. On the downside, the nearest major support is a long-term 50% level at $69.79.

Daily April WTI Crude Oil Technical Forecast

Trader reaction to the short-term 50% level at $77.77 will determine the direction of April WTI crude oil into the close on Tuesday.

Bullish Scenario

A sustained move over $77.77 will indicate the presence of buyers. Taking out the minor top at $78.28 will indicate the buying is getting stronger with the resistance cluster at $79.76 – $80.01 the next likely target.

Bearish Scenario

A sustained move under $77.77 will signal the presence of sellers. The first downside target is a minor pivot at $75.18, followed by $72.64.