U.S. West Texas Intermediate crude oil futures are soaring on Friday after OPEC and its allies agreed to extend oil supply cuts into April as they anticipate a stronger demand recovery amid the COVID-19 pandemic.
After a weak start to the week on expected production hikes by OPEC+, the market jumped higher on Thursday following the decision by the group, not to increase oil output, except to Russia and Kazakhstan. The real surprise to trader was the discipline the OPEC and its allies are showing in adherence to its long-term plan to tighten supply and drive prices higher.
Furthermore, they showed great restraint in keep output levels low in the wake of impressive vaccination numbers from the United States. Traders also shrugged off weaker demand numbers from China earlier in the week and a jump in the U.S. Dollar.
At 14:54 GMT, April WTI crude oil is trading $65.88, up $2.05 or +3.21%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out yesterday’s high. The trend changes to down on a move through $59.24.
The nearest support is a minor pivot at $62.66. This figure will move up as the market moves higher.
Daily Swing Chart Technical Forecast
The direction of the April WTI crude oil market on Friday will be determined by trader reaction to $63.83.
A sustained move over $63.64 will indicate the presence of buyers. If this continues to generate the same upside momentum we’ve seen this week then the market should have no trouble reaching the October 1, 2018 main top at $67.23.
A sustained move under $63.64 will signal the presence of sellers. The first downside target is the pivot at $62.66.
A close under $63.64 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.
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This article was originally posted on FX Empire