Crude Oil Price Update – Trader Reaction to $59.58 Sets the Tone Ahead of API Weekly Inventories Report

James Hyerczyk
·2 min read

U.S. West Texas Intermediate crude oil futures are trading higher, but well off its high, shortly before the release of the American Petroleum Institute’s (API) weekly inventories report at 20:30 GMT on Tuesday. According to preliminary estimates, U.S. crude oil inventories were seen falling last week, while distillate and gasoline stocks likely rose slightly.

At 20:14 GMT, May WTI crude oil futures are trading $59.43, up $0.78 or +1.33%. This is down from a high of $60.90.

Prices rose earlier in the session as investors looked for bargains following the previous day’s plunge on rising output from OPEC+, while strong economic data from the United States and China brightened recovery prospects.

Daily May WTI Crude Oil
Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $57.25 will reaffirm the downtrend.

The minor trend is also down. A trade through $61.75 will change the minor trend to up. This will also shift momentum to the upside. The move will be reaffirmed if buyers can take out the next minor top at $62.27.

A trade through $57.63 will indicate the selling is getting stronger, while taking out $57.25 will reaffirm the minor trend.

The main range is $51.37 to $67.79. May WTI crude oil futures are currently testing its retracement zone at $59.58 to $57.64. This zone is controlling the near-term direction of the market.

On the upside, resistance is a series of retracement zone levels at $61.85, $62.52 and $63.76.

Short-Term Outlook

The direction of the May WTI crude oil market into the close will be determined by trader reaction to $59.58.

Bearish Scenario

A sustained move under $59.58 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into a potential support cluster at $57.63, $57.64, $57.25 and $57.06.

Bullish Scenario

A sustained move over $59.58 will signal the presence of buyers. This is a potential trigger point for an acceleration into a potential resistance cluster at $61.75, $61.85, $62.27 and $62.52.

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This article was originally posted on FX Empire