U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Friday as energy firms began shutting U.S. production in the Gulf of Mexico ahead of the major hurricane expected to hit early next week.
At 20:19 GMT, October WTI crude oil is trading $68.66, up $1.24 or +1.84%.
Not only is the market trading at its highest level since August 12, but it’s also in a position to post it’s the biggest weekly gains in over a year. For the week, WTI is up more than 10%, which is its largest weekly percentage gain since June 2020.
To recap today’s events, oil producers on Friday have shut-in 59% of Gulf of Mexico crude production as the ninth-named storm of the season barreled towards the key U.S. offshore oilfields, according to the Bureau of Safety and Environmental Enforcement (BSEE).
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum has been trending higher since the confirmation of the closing price reversal bottom on August 23.
A trade through $69.39 will change the main trend to up. A move through $61.74 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The short-term range is $73.52 to $61.74. The market is currently testing its retracement zone at $67.63 to $69.02.
The main support is the retracement zone at $65.51 to $63.32. The market is currently trading on the strong side of this zone.
Short-Term Outlook
The price action late Friday puts October WTI crude oil in a position to challenge the short-term Fibonacci level at $69.02.
Look for the bullish tone to continue on a sustained move over $69.02. Taking out the main top at $69.39 will not only change the main trend to up, but it could trigger an acceleration to the upside with the next targets the July 30 main top at $73.52 and the July 6 main top at $74.77.
The first sign of weakness will be the failure to overtake $69.02. Look for a potential acceleration into $65.51 if the 50% level at $67.63 fails as support.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire