Crude Oil Price Update – Underpinned by Optimistic Remarks on China from IEA, OPEC

U.S. benchmark West Texas Intermediate crude oil futures are edging higher on Friday, putting the market in a position to post a second straight weekly gain.

The catalysts behind the move are rising economic prospects for China and resulting expectations of a boost to fuel demand in the world’s second-biggest economy.

At 13:45 GMT, March WTI crude oil is at $81.05, up $0.44 or +0.55%. On Thursday, the United States Oil Fund ETF (USO) settled at $70.59, up $1.08 or +1.55%.

The market is being underpinned by optimistic remarks from the International Energy Agency (IEA) and OPEC. The IEA said the lifting of COVID-19 restrictions in China is set to increase global demand to a record high this year. Earlier in the week, OPEC forecast a Chinese demand rebound in 2023.

Hopes for a softer tone from the Federal Reserve are also providing support. According to a Reuters poll, experts expect the Fed to increase rates by 25 basis points two more times before pausing.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned higher on Wednesday. A trade through $82.66 will signal a resumption of the uptrend. A move through $72.74 will change the main trend to down.

The minor trend is also up. A trade through $78.45 will change the minor trend to down. This will shift momentum to the downside.

The main range is $89.89 to $70.56. The market is currently trading inside its retracement zone at $80.23 to $82.51.

On the downside, the minor pivot at $77.70 is the first support. The short-term retracement zone at $76.61 to $75.18 is additional support.

Daily Swing Chart Technical Forecast

Trader reaction to the main 50% level at $80.23 is likely to determine the direction of the March WTI crude oil market on Friday.

Bullish Scenario

A sustained move over $80.23 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the resistance cluster at $82.51 – $82.66, followed by a main top at $83.14.

Taking out $83.14 will reaffirm the uptrend and could trigger an acceleration to the upside with the next major targets $87.00 and $89.89.

Bearish Scenario

A sustained move under $80.23 will indicate the presence of sellers. This could trigger a labored break with potential targets lined up at $78.45, $77.70 and $76.61.