U.S. West Texas Intermediate crude oil is trading at a multi-year high late Friday, putting the market in a position to post its third consecutive weekly gain. The catalysts driving the market higher are expectations of stronger worldwide demand, rapidly rising vaccination rates and the reopening of major economies.
At 18:13 GMT, July WTI crude oil is at $71.18, up $0.89 or +1.27%. Rollover to the August futures contract on Monday.
In other news, U.S. investment bank Goldman Sachs said it expects Brent crude prices to reach $80 per barrel this summer as vaccine rollouts boost global economic activity.
Finally, in an indication of future supply, U.S. oil rigs rose by six to 365 this week to their highest since April 2020, energy services firm Baker Hughes Co said in its weekly report. It was the biggest weekly increase of oil rigs in a month, Reuters reported.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through the intraday high at $71.24 reaffirm the uptrend.
A move through $61.56 will change the main trend to down. This is highly unlikely but since the market is up 14 sessions from its last main bottom, it’s currently trading inside the window of time for a potentially bearish closing price reversal top.
A close under $70.29 will form a daily closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.
The minor trend is also up. A trade through $68.68 will change the minor trend to down. This will also shift momentum to the downside.
The first minor range is $68.47 to $71.24. Its 50% level at $69.86 is potential support.
The second minor range is $65.25 to $71.24. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at $68.25 to $67.24. Since the main trend is up, buyers are likely to come in on the first test of this zone.
Daily Swing Chart Technical Forecast
The direction of the July WTI crude oil market into the close on Friday is likely to be determined by trader reaction to $70.29.
A sustained move over $70.29 will indicate the presence of buyers. Taking out the intraday high at $71.24 will indicate the buying is getting stronger.
A sustained move under $70.29 will signal the presence of sellers. If this creates enough downside momentum then look for a pullback into the pivot at $69.86. Look for buyers on the first test of this level.
The pivot at $69.86 is also the trigger point for an acceleration to the downside with the next targets clustered at $68.68, $68.47 and $68.25.
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This article was originally posted on FX Empire