Crude Oil Price Update – Strong Upside Momentum Could Challenge Major Fibonacci Level at $62.05

U.S. West Texas Intermediate crude oil futures are testing multi-month highs early Thursday, but once again on subdued volume. The market is following through to the upside after Tuesday’s late session surge. Prices rose on Christmas Eve after Russia said cooperation with OPEC on supply cuts would continue and amid optimism that the United States could finalize a trade agreement.

At 05:12 GMT, February WTI crude oil is trading $61.37, up $0.26 or +0.43%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early Thursday when buyers took out last week’s high at $61.40. The main trend will change to down on a move through the last swing bottom at $54.75.

A change in trend to down is highly unlikely, however, due to the prolonged move up in terms of price and time, the crude oil remains vulnerable to a closing price reversal top. This won’t change the trend to down, but it will indicate the selling is greater-than-the-buying at current price levels.

The minor trend is also up. A trade through $60.20 will change the minor trend to down. This will also shift momentum to the downside.

On the upside, the nearest resistance is the major Fibonacci level at $62.05.

On the downside, the nearest support is the major 50% level at $58.91, followed by a Fibonacci level at $58.66.

Daily Swing Chart Technical Forecast

Bullish Scenario

If the early upside momentum continues on Thursday then look for a surge into $62.05. Sellers could come in on the first test of this level. Overcoming it, however, will indicate the buying is getting stronger.

Bearish Scenario

If the intraday momentum shifts to the downside then look for a slight pullback into a minor pivot at $60.78, followed by the minor bottom at $60.02.

Side Notes

Official data for a change in the weekly crude oil inventories will be released on Friday, instead of the usual Wednesday, by the U.S. Energy Information Administration (EIA) due to the Christmas holiday.

U.S. crude oil stocks fell more than expected in the most recent week while gasoline and distillate inventories increased, data from industry group the American Petroleum Institute (API) showed on Tuesday.