WTI Crude Oil

Crude Oil Price Update – Needs to Hold $71.14 to Sustain the Upside Momentum

U.S. West Texas Intermediate crude oil futures are trading higher early Wednesday, boosted by a faster than expected demand recovery and a private industry report showing a drop in crude oil stockpiles. The bigger-than-expected draw in crude oil inventories was enough to offset another unexpected build in gasoline stocks.

At 06:34 GMT, September WTI crude oil is trading $71.52, up $0.38 or +0.53%.

Late Tuesday, the American Petroleum Institute (API) reported that U.S. crude supplies fell by 8.5 million barrels for the week ended June 11. The API report also showed gasoline stockpiles up by nearly 2.9 million barrels, while distillate inventories climbed by almost 2 million barrels.

At 14:30 GMT, the Energy Information Administration (EIA) will report its own crude oil inventories number. Traders are looking for a 2.1 million barrel draw.

Daily September WTI Crude Oil

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.

A trade through $61.06 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the market may be ripe for a closing price reversal top. This won’t change the main trend to down, but it could shift momentum to the downside for 2 to 3 days.

The minor trend is also up. A trade through $68.05 will change the minor trend to down. It will be reaffirmed by a trade through the next minor bottom at $67.84.

The minor range is $68.05 to $71.76. Its 50% level at $69.91 is the nearest support. This level will move up as the market move higher.

The second minor range is $64.60 to $71.76. Its 50% level at $68.18 is additional support.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market on Wednesday is likely to be determined by trader reaction to $71.14.

Bullish Scenario

A sustained move over $71.14 will indicate the presence of buyers. Taking out the intraday high at $71.76 will indicate the buying is getting stronger. This could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $71.14 will signal the presence of sellers. This could trigger an intraday break into the first pivot at $69.91. Look for buyers on the first test of this level. If it fails as support, the selling could extend into the second 50% level at $68.18.

Side Notes

A close under $71.14 will form a closing price reversal top. If confirmed then look for the start of a 2 to 3 day correction.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.