Crude Oil Price Update – Strong US Dollar Offsetting Supply Disruption Worries

U.S. West Texas Intermediate crude oil futures are edging higher on Monday despite a stronger U.S. Dollar and worries about weak U.S. economic growth. The bearish news is being offset by worries over supply as the threat of potential OPEC+ output cuts continues and a new conflict in Libya begins.

At 09:50 GMT, October WTI crude oil futures are trading $93.91, up $0.85 or +0.91%. On Friday, the United States Oil Fund ETF (USO) settled at $75.85, down $0.65 or -0.85%.

Since early last week, the market has been underpinned by reports that OPEC+ would possibly cut production to stabilize prices, which according to Reuters’ sources, could coincide with a boost in supply from Iran after it reaches a nuclear deal with the West.

Perhaps capping gains, however, is the stronger U.S. Dollar, which hit a 20-year high on Monday after Federal Reserve Chairman Jerome Powell signaled that interest rates would be kept higher for longer to curb inflation.

The wild card this week is the unrest in Libya’s capital. If this escalates into a full-blown conflict and disrupts oil supply from the OPEC nation, then look for a spike in prices to the upside.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $95.76 will signal a resumption of the uptrend. A move through $85.37 will change the main trend to down.

The minor trend is also up. A trade through $91.08 will change the minor trend to down. This will shift momentum.

The short-term range is $99.75 to $85.37. The market is currently testing its retracement zone at $92.56 to $94.26.

On the upside, the major target is a retracement zone at $100.41 to $103.95. On the downside, the nearest support are 50% levels at $90.57 and $88.26.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term Fibonacci level at $94.26 is likely to determine the direction of the October WTI crude oil market on Monday.

Bullish Scenario

A sustained move over $94.26 will indicate the presence of buyers. This could trigger a surge into the main top at $95.76. This is a potential trigger point for an acceleration into the resistance cluster at $99.75 to $100.41.

Bearish Scenario

A sustained move under $94.26 will signal the presence of sellers. The first downside target is the short-term 50% level at $92.56.

A failure to hold $92.56 could trigger a further break into a minor bottom at $91.08 and a pivot at $90.57. Taking out the latter could extend the move into the major long-term support at $88.26.