While crude oil had a poor start to the week, trading down to a low of 55.08 on Monday, we have seen a recovery back up, testing resistance at 57.80. The crude market got a supportive headline overnight with reports that a U.S. tanker was unloading at a Chinese port. Additional support came from a decrease in Venezuelan exports as well as a decline of U.S. inventory levels by 8.6 million barrels. Crude has been in a longer-term trend to the upside since its December 24th low of 43.00. Momentum studies are approaching overbought levels and with the market testing this resistance level over the past couple weeks we could see some sideways trading in the short term. A close over resistance would continue the trend to the upside with 65.00 being the next major target. Support comes in at 55.35 and if trade can break that, expect a pullback down to 52.20. As you can see on the chart below, the market has been in a wedge pattern that could provide a breakout either way in the next couple weeks.
Crude Oil Apr ’19 Daily Chart