U.S. West Texas Intermediate crude oil futures are edging higher late in the session on Friday, but slightly lower than its seven-year high reached earlier in the session. None-the-less, the U.S. benchmark is poised to post its seventh consecutive weekly gain. The upside momentum suggests the market may hit triple-digits well ahead of estimates.
At 21:10 GMT, March WTI crude oil futures are trading $92.16, up $1.89 or +2.09%. The United States Oil Fund ETF (USO) settled at $64.91, up $1.40 or +2.20%.
Worries over supply disruptions from the Ukraine crisis provided support all week, but Friday’s price surge was primarily blamed on a winter storm in Texas that was threatening production in the Permian Basin, the largest U.S. shale play.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A late session trade through $93.17 will signal a resumption of the uptrend. A trade through $81.90 will change the main trend to down.
The minor trend is also up. A new minor bottom has formed at $86.75. A trade through this level will change the minor trend to down and shift momentum to the downside.
The market is currently straddling a long-term Fibonacci level at $92.38. This is the last major level to overcome before the psychological $100.00 level.
The minor range is $86.75 to $93.17. Its 50% level at $89.96 is the nearest support.
Short-Term Outlook
We’re currently in a news driven rally fueled by strong fundamentals and speculative buyers. We know the price action is strong because traders have been buying strength without fear of a pullback.
Strong demand and low supply are the main drivers of the rally. The headlines over Ukraine and the Middle East are the bullish wildcards. Even if there is a setback, we expect traders to re-emerge on the price dip.
The $100 barrier is a psychological target. It’s not actual resistance. In fact, it may even become a trigger point for an acceleration to the upside.
If there is selling pressure at this level, it will come from profit-taking and not new shorting. Reports last fall called for crude to hit $100 in the third or fourth quarter so reaching it over the short-run may make it overvalued which is usually a good reason to take some cash off the table.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/bullish-wti-oil-traders-eyeing-211000127.html