Crude Oil Bulls Betting on Russian Oil Ban, Bears on China Demand Drop

U.S. West Texas Intermediate crude oil and international-benchmark Brent crude oil futures jumped to their highest level in more than a week on Friday before closing lower. Nonetheless, the markets were able to hold on to their weekly gains.

Helping to drive prices higher last week were fears over Russian supply distribution. The news offset COVID-19 lockdowns in China, the world’s biggest crude importer, that are raising demand concerns.

Last week, June WTI crude oil settled at $104.69, up $2.62 or +2.57%. July Brent crude oil finished at $107.14, up $0.99 or +0.92% and the United States Oil Fund ETF (USO) closed at $77.16, up $0.85 or +1.11%.

Meanwhile, on the supply side, OPEC+ is likely to stick to its existing deal and agree to another small output increase for June when it meets on May 5, six sources from the producer group told Reuters on Thursday.

Mixed EIA Report Highlights Global Demand for US Energy Products

Although crude inventories rose by 692,000 barrels in the week to April 22 to 414.4 million barrels, short of analysts’ expectations in a Reuters poll for a 2 million-barrel rise, the markets were supported because of a drop in U.S. fuel stocks.

Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels in the week to 107.3 million barrels, driving those stocks to their lowest level since May of 2008.

Demand for heating oil is also likely to increase because Moscow has halted gas supplies to Bulgaria and Poland for rejecting its demand for payment in roubles. Conditions could even worsen if Russia decides to stop supplying other countries with gas.

Weekly Forecast

The embargo news is expected to contribute to heightened volatility this week along with demand concerns as China shows no signs of easing lockdown measures despite the impact on its economy and global supply chains.

The current choppy price action is a reflection of the ongoing battle between supply and demand. China’s lockdowns are raising fears that crude oil demand from factories will drop over the near-term. However, an embargo of Russian oil will make global supplies even tighter.

Traders are also on edge because of the Fed’s mission to slow down inflation by slowing down economic growth. Meanwhile, OPEC+’s decision to increase production is not likely to move the supply numbers much.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Crude Oil: Weakens Under $105.77, Strengthens Over $109.40

U.S. West Texas Intermediate crude oil futures declined on Friday, erasing all of its earlier gains in a volatile trading session. A late session sell-off in the U.S. stock market combined with a steep drop in U.S. heating oil futures were the catalysts behind the weak price action. The nearby heating oil futures contract plummeted by more than 20% at one point on the day of its expiration.

On Friday, June WTI crude oil settled at $104.69, down $0.67 or -0.64%. The United States Oil Fund ETF (USO) finished at $77.18, down $0.90 or -1.15%.

According to Reuters, the front-month U.S. heating oil contract, which is proxy for diesel prices, soared to a record high of $5.8595 a gallon before falling as low at $4.4067 a gallon. Diesel futures have climbed as investors worry about tight supplies globally following Russia’s invasion of Ukraine.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will reaffirm the uptrend. A move through $95.28 will change the main trend to down.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the buying on Friday at $107.99.

On the downside, the first support is a pivot at $102.24, followed by a minor retracement zone at $100.90 to $98.94.

Short-Term Outlook

The main trend may be up, but Friday’s formation of a minor closing price reversal top suggests momentum may be getting ready to shift to the downside.

At the start of Monday’s trade, the chart formation suggests prices could weaken on a sustained move under $105.77 with a cluster of levels at $102.24, $100.90 and $98.94, potential downside targets.

Since the main trend is up, buyers could return between $102.24 and $98.94.

The most bullish sign on the chart will be a breakout over the short-term Fibonacci level at $109.40. But buyers will have to overcome a 50% level at $105.77, a closing price reversal top at $107.99 and a main top at $109.20 before we’ll see the breakout.

Taking out $109.40 could trigger an acceleration to the upside with $113.51 the next major target.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Crude Oil Testing Short-Term Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading at their highest level in more than a week on Friday as fears over Russian supply distribution trumped COVID-19 lockdowns in China, the world’s biggest crude importer.

At 11:42 GMT, June WTI crude oil futures are trading $106.28, up $0.92 or +0.87%. On Thursday, the United States Oil Fund ETF (USO) settled at $78.12, up $1.75 or +2.29%.

In addition to today’s early gains, the market is set to finish up on the week and post its fifth straight monthly gain. Bolstering prices most of the week has been the likelihood that Germany will join other European Union member states in an embargo on Russian oil.

The embargo news is expected to contribute to heightened volatility also with demand concerns as China shows no signs of easing lockdown measures despite the impact on its economy and global supply chains.

Also on the supply side, OPEC+ is likely to stick to its existing deal and agree another small output increase for June when it meets on May 5, six sources from the producer group told Reuters on Thursday.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will reaffirm the uptrend. A move through $95.28 will change the main trend to down.

The minor trend is also up. This is controlling the upside momentum.

The short-term range is $121.17 to $90.37. The market is currently testing its retracement zone at $105.77 to $109.40.

On the downside, potential support is a pivot at $102.24 and a minor retracement zone at $100.90 to $98.94.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market on Friday is likely to be determined by trader reaction to $105.77.

Bullish Scenario

A sustained move over $105.77 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the resistance cluster at $109.20 – $109.40. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $105.77 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into a series of potential resistance levels at $102.24, $100.90 and $98.94.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Crude Oil in Position to Challenge $105.77 – $109.40 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session after shedding earlier weakness as investors weighed up tightening Russian supplies and the prospect of slowing fuel demand in China.

At 16:11 GMT, June WTI crude oil is trading $104.22, up $2.20 or +2.16%. The United States Oil Fund is at $77.51, up $1.14 or +1.49%.

Tightening Supplies Worries Tied to Russian Production

Russia may see its oil production fall by as much as 17% in 2022, an economy ministry’s document seen by Reuters showed on Wednesday, as the country struggles with Western sanctions. The scale of the production decline would be the most significant since the 1990s when the oil industry suffered from underinvestment.

Russian oil output started to decline in March and had fallen by around 7.5% by mid-April. The International Energy Agency has said the impact of sanctions and buyers’ aversion to Russian oil would take full effect from May onwards.

China Demand Disrupted by COVID Lockdowns

In China, Beijing closed some public spaces and stepped up COVID-19 checks at others as most of the city’s 22 million residents embarked on more mass testing in an effort to avert a Shanghai-like lockdown. The most recent lockdown has disrupted factories and supply chains, raising fears over the country’s economic growth.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $95.28 will change the main trend to down.

On the downside, the support is a series of retracement levels including a minor pivot at $102.24, followed by a minor retracement zone at $100.90 to $98.94.

On the upside, the nearest resistance is a short-term retracement zone at $105.77 to $109.40.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market on Thursday is likely to be determined by trader reaction to $102.24.

Bullish Scenario

A sustained move over $102.24 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor top at $105.42, followed by the short-term 50% level at $105.77.

Taking out $105.77 will indicate the buying is getting stronger. This could trigger a surge into the resistance cluster at $109.20 – $109.40.

Bearish Scenario

A sustained move under $102.24 will signal the presence of sellers. This could lead to a labored break with the first targets $100.90 and $98.94.

Taking out $98.94 will indicate the selling pressure is getting stronger. This could trigger an acceleration into the main bottom at $95.28.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Boosted by Concerns about Tight Worldwide Supply

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are up slightly into the close on Wednesday. After feeling pressure earlier in the week on demand worries, traders shifted momentum to the upside on the back of ongoing concerns about tight worldwide supply.

Traders are still worried about the stronger dollar weighing on foreign demand and China’s relentless lockdowns against the spread of coronavirus sapping demand, but those two issues seemed to be offset by Russia’s move to cut off gas shipments to two European nations.

The markets were also underpinned by another drawdown in U.S. distillate and gasoline inventories according to a key weekly government report.

At 20:46 GMT, June WTI crude oil is trading $102.05, up $0.35 or +0.34%. July Brent crude oil is at $104.95, up $0.34 or +0.33%. The United States Oil Fund ETF (USO) settled at $76.37, down $0.09 or -0.12%.

Strong Greenback Weighs on Foreign Demand for Dollar-Denominated Oil Products or Does It?

The U.S. Dollar soared to a multi-year high against a basket of major currencies on Wednesday, led mostly by a plunge in the Euro as investors grew increasingly concerned with energy supply and a potential recession in the region.

On paper, a strong dollar is supposed to weigh on demand for dollar-denominated crude. It may not be obvious, but crude oil prices have been somewhat capped since the dollar turned bullish at the end of March. Nonetheless, Europe needs oil and the U.S. is willing to supply it to them even if it means the Europeans are going to be paying premium prices.

Blame this one on Putin and his war machine. Furthermore, the European Commission is close to deciding whether to ban the import of Russian energy products. If they do then the U.S. will become a key supplier and it won’t even matter that the Euro is tanking. The Europeans have to find oil somewhere.

Weekly EIA Report Highlights Global Demand for US Energy Products

Although crude inventories rose by 692,000 barrels in the week to April 22 to 414.4 million barrels, short of analysts’ expectations in a Reuters poll for a 2 million-barrel rise, the markets were supported because of a drop in U.S. fuel stocks.

Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels in the week to 107.3 million barrels, driving those stocks to their lowest level since May of 2008.

Why did distillate stock piles fall? Because the U.S. keeps exporting products like diesel and heating oil.

Distillate stocks have steadily declined in part due to heavy demand overseas for U.S. products, which has grown since Russia’s invasion of Ukraine. Russia is the largest exporter of refined products and numerous countries have banned imports of Russian oil, leading to a hunt for other barrels.

Europe needs diesel fuel for the trucks that supply the Euro Zone with products. Europe also needs heating oil and coal as substitutes for natural gas that may become short-supplied.

Demand for heating oil is also likely to increase because Moscow has halted gas supplies to Bulgaria and Poland for rejecting its demand for payment in roubles. Conditions could even worsen if Russia decides to stop supplying other countries with gas.

Short-Term Outlook

It looks like Russia is trying to challenge the sanctions imposed on it by most of the world by cutting off two countries from their gas supply. This could have a domino effect that could reach all the way to the gas pumps in the United States.

Although the government tried to push gasoline and diesel prices lower by releasing crude oil from the strategic supply, the strategy may not work if the U.S. keeps selling the energy products to Europe. Who wouldn’t want to do that especially since the oil companies are probably getting paid in expensive dollars?

So far this year, the United States has exported 6.3 million barrels of refined products daily, up 25% from the same period a year ago.

How is that helping to depress domestic gasoline prices?

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Firms Despite Bearish Outlook for US Inventories

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Tuesday as the volatile, two-sided trade continues with traders weighing the bearish impact of lower Chinese demand against the bullish impact from a plunge in Russian supply. Meanwhile, traders are preparing for inventories reports from the American Petroleum Institute late Tuesday and the Energy Information Administration early Friday.

At 12:36 GMT, June WTI crude oil is trading $99.46, up $0.92 or +0.93% and June Brent crude oil is at $103.94, up $1.62 or +1.58%. On Monday, the United States Oil Fund ETF (USO) settled at $74.68, down $1.63 or -2.14%.

Given the offsetting fundamentals, traders are hoping the domestic reports from the API and EIA provide the necessary insight they need to trade the markets with clarity and conviction. No one really likes a choppy, two-sided trade except the brokers.

Russian Oil Phase-Out Providing Support

The prospect of supply tightness in the physical market related to the phasing out of Russian oil is helping to prop up WTI and Brent crude oil futures. But so far, gains have been limited.

Reuters is reporting the parliamentary parties of Germany’s ruling coalition have called on the government to push ahead with a plan to phase out Russian oil and gas imports “as soon as possible”.

This delay in implementing a total ban on Russian energy products has allowed the release of oil from emergency reserves to do their job and alleviate some of the concerns over tight supply. It has also shifted the focus towards the demand side of the equation.

Traders Playing Waiting Game with China Lockdowns

No one knows how long the lockdowns in China are going to last. So let’ just call it a “known unknown”.

Demand concerns in China, the world’s largest crude oil importer, have been generating downward pressure for weeks. Recently, China’s capital Beijing expanded its COVID-19 mass testing to much of the city of nearly 22 million, as the population braced for an imminent lockdown similar to Shanghai’s stringent curbs.

US Inventories Report Could Signal Resumption of Bearish Tone

Perhaps underpinning today’s market is the announcement of monetary policy support from China’s central bank. Others are saying, however, the intraday rally is likely to be short-lived because of the possibility of increased U.S. supply.

In a bearish signal for oil markets, five analysts polled by Reuters estimated on average that U.S. crude inventories had increased by 2.2 million barrels in the week to April 22.

The poll was conducted ahead of the release of the inventory report from the American Petroleum Institute (API) at 20:30 GMT.

This report can surprise so be prepared. Last week, U.S. crude inventory unexpectedly declined the week-ending April 15.

Crude inventories fell by 4.5 million barrels. Economists were expecting an increase of about 2.5 million barrels.

For a look at all of today’s economic events, check out our economic calendar.

WTI Crude: Trading on Weak Side of Retracement Zone

U.S. West Texas Intermediate crude oil futures are down sharply on Monday, pressured by ongoing concerns that extended COVID-19 lockdowns in Shanghai and potential increases to U.S. interest rates would hurt global growth and oil demand.

The selling pressure could stop abruptly later in the session if the European Commission announces a ban on Russian oil and oil products, but the move is still being discussed with no deadline on the books.

At 10:12 GMT, June WTI crude oil is at $97.63, down $4.44 or -4.35%. On Friday, the United States Oil Fund ETF (USO) settled at $76.30, down $1.82 or -2.33%. Based on the overnight performance in the global equity markets and in crude oil, the ETF is expected to open lower.

Expectations of Lower Demand Offsetting Supply Concerns

The current price action is a reflection of the ongoing battle between supply and demand. China’s lockdowns are raising fears that crude oil demand from factories will drop over the near-term. Traders are also on edge because of the Fed’s mission to slow down inflation by slowing down economic growth.

The demand fears are outstripping the potential supply issues, driving down prices. Oil has been supported by tight supply throughout Russia’s war with Ukraine, but the price action suggests bullish traders want to see more issues with supply before playing the long side.

The biggest event that could stop the price slide and perhaps drive prices higher is a ban against Russian oil imports. Meanwhile, the market is seeing some light support from outages in Libya.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through $92.60 will change the main trend to down. A move through $109.20 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $105.42 will change the minor trend to up.

The minor range is $92.60 to $109.20. The market is currently trading on the weak side of its retracement zone at $98.94 to $100.90, making it resistance.

On the downside, the major support is the retracement zone at $91.33 to $84.28. This zone stopped the selling at $90.37 on March 15.

Daily Swing Chart Technical Forecast

Trader reaction to $98.94 is likely to determine the near-term direction of the June WTI crude oil futures contract.

Bearish Scenario

A sustained move under $98.94 will indicate the presence of sellers. If this move continues to exert enough downside momentum then look for the selling to possibly extend into the main bottom at $92.60. This is the last potential support before the $91.33 to $84.28 retracement zone.

Bullish Scenario

A sustained move over $98.94 will signal the presence of buyers. The first target is a minor 50% level at $100.90.

Overtaking $100.90 will indicate the buying is getting stronger. This could trigger an acceleration into a minor top at $105.42, followed by a short-term resistance zone at $105.77 to $109.40.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Oil: Rangebound Between Pair of Retracement Zones

U.S. West Texas Intermediate crude oil futures are down late in the session on Friday, putting it in a position to post a nearly 5% weekly loss. Buyers are trying to form an intraday support base, however, the fundamentals are mixed but mostly bearish.

Putting the pressure on the market is the prospect of weaker global growth due to the war in Ukraine and soaring inflation, higher interest rates, a strong U.S. Dollar and COVID-19 lockdowns in China that are being blamed for demand destruction.

At 17:55 GMT, June WTI crude oil futures are trading $102.16, down $1.63 or -1.57%. The United States Oil Fund ETF (USO) is at $76.30, down $1.82 or -2.33%.

Looking ahead to next week, bullish traders are hoping the European Commission announces the widely anticipated ban on Russian crude oil and other energy products.

An EU source told Reuters this week the European Commission was working to speed up availability of alternative energy supplies. Additionally, a senior White House adviser said he was confident Europe is determined to close off or further restrict remaining Russian oil and gas exports.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $92.60 will change the main trend to down.

The minor trend is also up. A trade through $99.88 will change the minor trend to down. This will also shift momentum to the downside. A move through the minor top at $105.42 will be a sign of strength.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the buying at $109.20 on April 18.

The minor range is $92.60 to $109.20. Its retracement zone at $100.90 to $98.94 is support. This zone stopped the selling $99.88 on April 20.

Daily Swing Chart Technical Analysis

Trader reaction to $100.90 is likely to determine the direction of the June WTI crude oil futures market into the close.

Bullish Scenario

A sustained move over $100.90 will indicate the presence of buyers. If this move creates enough upside momentum then look for a late session rally into $105.42 – $105.77.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. Taking out $99.88 will indicate the selling pressure is getting stronger. This could lead to a test of $98.84. This Fibonacci level is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Oil: Sellers Next Target $100.90 – $98.94 RT Zone

U.S. West Texas Intermediate crude oil futures are edging lower shortly after the mid-session on Friday, headed for a weekly loss. Although the fundamentals remain mixed, concerns over demand are outweighing worries over supply.

Short-term bullish traders have been liquidating long positions all week, encouraged by the prospect of weaker global growth, higher interest rates and COVID lockdowns in China.

At 13:24 GMT, June WTI crude oil futures are trading $102.01, down $1.78 or -1.72%. The United States Oil Fund ETF (USO) is at $76.68, down $1.44 or -1.84%.

Long-term bullish traders, however, have been playing the waiting game, encouraged by the possibility of a ban on Russian oil by the European Union that would further tighten supply.

IMF Economic Growth Cuts Set the Tone This Week

The heavy selling started this week after the International Monetary Fund (IMF), cut its global economic growth forecast and said it could further downgrade it if Western countries expand their sanctions against Russia over its war against Ukraine, and energy prices rise further.

Bloomberg Analysis Also Sees Slower Growth

The German government will cut its growth forecast for 2022 to 2.2% from 3.6%, a government source said, while Chinese demand for gasoline, diesel and aviation fuel in April is expected to slide 20% from a year earlier, Bloomberg reported, as many of China’s biggest cities, including Shanghai, are in COVID-19 lockdowns.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $92.60 will change the main trend to down.

The minor trend is also up. A trade through $99.88 will change the minor trend to down and shift momentum to the downside. A move through the minor top at $105.42 will indicate the buying is getting stronger.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the buying at $109.20 on April 18.

The minor range is $92.60 to $109.20. Its retracement zone at $100.90 to $98.94 is support. This area stopped the selling at $99.88 on April 20.

Daily Swing Chart Technical Forecast

The direction of June WTI crude oil futures into the close on Friday is likely to be determined by trader reaction to $100.90.

Bullish Scenario

A sustained move over $100.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the minor top at $105.42, followed by the short-term 50% level at $105.77.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. Taking out the minor bottom at $99.88 will indicate the selling is getting stronger with the minor Fibonacci level at $98.94 the next target.

The Fib level at $98.94 is a potential trigger point for an acceleration to the downside with $92.60 – $91.33 the next likely target.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Supported by Unexpected Drop in US Inventories

U.S. West Texas Intermediate crude oil futures and international-benchmark Brent crude oil futures are edging higher on relatively low volume early Thursday.

The price action suggests traders are taking a break from a volatile week which featured supply losses from Libya and a fear of lower demand after the International Monetary Fund (IMF) cut its global growth forecasts.

Helping to provide some support overnight is an unexpected drop in U.S. crude stockpiles.

At 05:14 GMT, June WTI crude oil futures are trading $103.21, up $1.02 or +1.00%. June Brent crude oil is at $107.79, up $0.99 or +0.93%. On Wednesday, the United States Oil Fund ETF (USO) settled at $77.25, up $0.39 or +0.51%.

Supply Issue:  Libya Shutdowns Cause 550K Bpd Output Loss, NOC Media Office Says

Libya is currently losing more than 550,000 barrels per day in oil production from blockades on major fields and export terminals, the National Oil Corporation media office said on Wednesday.

The blockades by groups in southern and eastern Libya citing political demands have caused NOC to declare force majeure on output from several major fields and ports in recent days. The first field went offline on Sunday with others following on Monday and Tuesday, Reuters reported.

Demand Issue:  IMF Cuts Global Growth Forecast Due to “Seismic Waves” from Russia’s War in Ukraine

The International Monetary Fund on Tuesday slashed its forecast for global economic growth by nearly a full percentage point, citing Russia’s war in Ukraine, and warning that inflation was now a “clear and present danger” for many countries, Reuters reported.

The war is expected to further increase inflation, the IMF said in its latest World Economic Outlook, warning that a further lightening of Western sanctions on Russia to target energy exports would cause another major drop in global output.

Downgrading its forecasts for the second time this year, the global crisis lender said it now projects global growth of 3.6% in both 2022 and 2023, a drop of 0.8 and 0.2 percentage point, respectively from its January forecast due to the war’s direct impacts on Russia and Ukraine and global spillovers.

Short-Term Outlook

While the IMF news has been the primary driver of the price action this week, crude oil did get a little support on Wednesday from a surprise drop in U.S. crude stockpiles as reported by the U.S. Energy Information Administration (EIA).

U.S. crude stockpiles fell sharply last week due to a surge in exports to a more than two-year high. Meanwhile production neared pre-pandemic levels, the EIA said on Wednesday.

Crude inventories fell by 8 million barrels in the week ended April 15 to 413.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.5 million-barrel rise.

That was driven by a surge in exports, which rose to 4.3 million barrels per day in the most recent week, the most since March 2020, while imports fell to their lowest since April 2021. This is a reflection of worldwide demand for crude as Russian exports have fallen since its invasion of Ukraine in February.

Those exports offset an injection of 4.7 million barrels from U.S. strategic reserves as part of the White House’s efforts to lower fuel prices overall.

For a look at all of today’s economic events, check out our economic calendar.

June WTI Oil: Set Up for Test of $100.90 – $98.94 Support

U.S. West Texas Intermediate crude oil futures are trading flat early Wednesday after dropping more than 5% the previous session. The market is being underpinned by a report from late Tuesday that showed U.S. oil inventories unexpectedly fell last week.

At 01:15 GMT, June WTI crude oil futures are trading $102.07, up $0.02 or +0.02%. On Tuesday, the United States Oil Fund ETF (USO) settled at $76.87, down $3.54 or -4.40%.

June WTI crude oil was down sharply on Tuesday on concerns about energy demand after the International Monetary Fund (IMF) cut its economic growth forecasts. However, the demand concerns have been offset by a tighter supply outlook following sanctions on Russia.

An unexpected drop in U.S. crude inventory is also helping to underpin prices. Late Tuesday, the American Petroleum Institute (API) reported inventories fell by 4.5 million barrels for the week-ended April 14. Analysts were looking for an increase of about 2.5 million barrels.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $92.60 will change the main trend to down.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the selling at $109.20 on Monday.

The minor range is $92.60 to $109.20. Its retracement zone at $100.90 to $98.94 is the next target zone.

The main range is $61.48 to $121.17. Its retracement zone at $91.33 to $84.28 is the major support zone holding up the market.

Daily Swing Chart Technical Forecast

The direction of June WTI crude oil early Wednesday is likely to be determined by trader reaction to $100.90.

Bullish Scenario

A sustained move over $100.90 will indicate the presence of buyers. If this is able to create enough upside momentum then look for a surge into the short-term 50% level at $105.77.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the minor Fibonacci level at $98.94.

Look for a technical bounce on the first test of $98.94. A failure to hold this level could trigger an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil in Position to Test Support Zone at $100.90 – $98.94

U.S. West Texas Intermediate crude oil futures are trading sharply lower on Tuesday as renewed demand concerns encouraged bullish speculators to exit risky long positions. Driving the price action is the news that the International Monetary Fund (IMF) reduced its economic growth forecast and warned of higher inflation.

At 15:19 GMT, June WTI crude oil is trading $102.70, down $4.91 or -4.56%. The United States Oil Fund ETF (USO) is at $77.20, down $3.21 or -3.99%.

The IMF on Tuesday cut its forecast for global economic growth by nearly a full percentage point, citing Russia’s invasion of Ukraine, and warned that inflation is now a “clear and present danger” for many countries.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $92.60 will change the main trend to down.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This area stopped the buying on Monday at $109.20.

The minor range is $92.60 to $109.20. Its retracement zone at $100.90 to $98.94 is potential support.

The main range is $61.48 to $121.17. Its retracement zone at $91.33 to $84.28 is major support.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil futures contract into the close on Tuesday is likely to be determined by trader reaction to $100.90.

Bullish Scenario

A bullish tone could develop late in the session following a successful test of the minor retracement zone at $100.90 to $98.94. Holding above the 50% level at $100.90 will indicate the return of buyers. If this is able to generate enough upside momentum then we could see a retest of $105.77 to $109.40.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to continue into the Fibonacci level at $98.84.

The Fib level at $98.84 is a potential trigger point for an acceleration to the downside with $92.60 the next major target price.

Side Notes

The chart pattern went from potentially bullish to potentially bearish following the release of the IMF report. If another secondary lower top forms at $109.20 then look out to the downside. We could be looking at a near-term break into at least $88.29.

For a look at all of today’s economic events, check out our economic calendar.

WTI Crude Reaction to $105.77 – $109.40 Sets Near-Term Tone

U.S. West Texas Intermediate crude oil futures closed higher last Thursday after recovering from an early session setback. Fueling the rally was a combination of short-covering and aggressive buying in reaction to reports that the European Union might phase in a ban on Russian oil imports.

On Thursday, June WTI crude oil futures settled at $106.38, up $2.59 or +2.50%.

The market turned higher late in the session after the New York Times reported that the European Union was moving toward adopting a phased-in ban of Russian oil, to give Germany and other countries time to arrange alternative suppliers.

A phased-in ban would force European buyers “to seek alternative sources, some of which in the near term is being met by Strategic Petroleum Reserve releases, but in the future, more supplies coming out of the ground will be required,” Andrew Lipow of Lipow Oil Associates in Houston said.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $107.00 will signal a resumption of the uptrend. A move through the next main top at $113.51 will reaffirm the uptrend. A trade through $92.60 will change the main trend to down.

The short-term range is $121.17 to $90.37. The market is currently testing its retracement zone at $105.77 to $109.40. This zone is controlling the near-term direction of the futures contract.

The main range is $61.48 to $121.17. Its retracement zone at $91.33 to $84.28 is support. This area is controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market early Monday is likely to be determined by trader reaction to $105.77.

Bullish Scenario

A sustained move over $105.77 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the Fibonacci level at $109.40. Taking out this level could trigger a surge into the next main top at $113.51.

Bearish Scenario

A sustained move under $105.77 will signal the presence of counter-trend sellers. This could trigger a break into a minor pivot at $99.80.

Since the main trend is up, buyers could come in on a test of $99.80. If it fails, however, then look for the selling to possibly extend into the main bottom at $92.60.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Reverses Higher on Threat of Russian Oil Embargo

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher late in the session on Thursday on low volume ahead of a public holiday. After early session weakness, the market is testing its high of the week, fueled mostly by end-of-the-week short-covering ahead of the long Easter holiday weekend.

At 20:25 GMT, June WTI crude oil futures are trading $105.98, up $2.19 or +2.11%. June Brent crude oil is at $111.39, up $2.61 or +2.40% and the United States Oil Fund ETF (USO) settled at $79.55, up $1.13 or +1.44%.

Oil Prices Slip Early, Recover Late

Oil prices were weighed down early in the session by a larger-than-expected build in U.S. oil stocks against tightening global supply. Both contracts on Wednesday had shrugged off a build in U.S. crude inventories to end the trading session over 4% higher.

Prices rose in the afternoon on news that the European Union might phase in a ban on Russian oil imports. The New York Times reported that the European Union was moving toward adopting a phased-in ban of Russian oil, to give Germany and other countries time to arrange alternative suppliers.

Threat of Russian Oil Embargo Shifts Momentum

After drifting sideways to lower for a little more than a month, June crude oil momentum has shifted to the upside. The threat of limiting access to Russian crude oil and crude oil products is the catalyst behind the change.

On Wednesday, the International Energy Agency (IEA) warned that from May onwards roughly 3 million barrels per day of Russian oil could be shut in due to sanctions or buyers voluntarily shunning Russian cargoes.

Meanwhile, global trading houses also plan to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May, Reuters reported on Wednesday.

New Sources of Supply Will Be Needed

A phased-in ban of Russian crude oil and products would force European buyers “to seek alternative sources, some of which in the near term is being met by Strategic Petroleum Reserve (SPR) releases, but in the future, more supplies coming out of the ground will be required,” Andrew Lipow of Lipow Oil Associates in Houston said.

In response to this need, U.S. oil production forecasts are being revised upwards despite labor and supply chain constraints as higher prices spur more drilling and will completion activity, according to industry experts.

Meanwhile, U.S. oil rigs rose by two to 548 this week, their highest since April 2020, energy services firm Baker Hughes said in a report.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Facing Challenge at $101.32 – $106.12

U.S. West Texas Intermediate crude oil futures are moving higher on Tuesday on renewed supply fears and as Shanghai’s relaxation of some COVID-19 restrictions eased concerns about Chinese demand.

At 14:01 GMT, May WTI crude oil futures are trading $99.65, up $5.36 or +5.68%. The United States Oil Fund is at $75.27, up $2.97 or +4.11%.

Bullish News Outweighing Bearish Factors

Traders appear to be shrugging off worries about strategic petroleum releases from major oil consuming countries after several days of weakness, while shifting their focus to a warning from OPEC that it would be impossible to replace potential supply losses from Russia.

Also supporting the intraday strength are reports that the European Union is preparing to slap an embargo on Russian oil. Meanwhile on the demand front, Shanghai said on Monday that more than 7,000 residential units had been classified as lower-risk after reporting no new infections for 14 days and districts have since been announcing which compounds can be opened up.

The big question that needs to be answered is whether the market has already discounted the “new” strategic oil supply from the United States and other major oil consumers. If this is true then prices can turn higher rather quickly on any bullish news because that story had the potential to become a major bearish event.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $92.93 will signal a resumption of the downtrend. A move through $105.59 will change the main trend to up.

The major support is a long-term retracement zone at $94.14 to $86.52. It stopped the selling at $92.93 on Monday and at $92.20 on March 15.

On the upside, the first resistance target is the intermediate Fibonacci level at $101.32, followed by the 50% level at $106.12.

If the main trend changes to up, then the short-term retracement zone at $109.31 to 113.35 will become the primary target area.

Daily Swing Chart Technical Forecast

Look for an upward bias on a sustained move over $94.14. Since the main trend is down, sellers could come in on the first test of $101.32. Overcoming it, however, could trigger a surge into the $105.59 main top and the 50% level at $106.12.

A failure to hold $94.14 will be a sign of weakness. Taking out the minor bottom at $92.93 will indicate the selling pressure is getting stronger. If sellers can take out $92.20 then look for a possible extension of the weakness into $86.52.

For a look at all of today’s economic events, check out our economic calendar.

Big Challenge for WTI Bulls on Test of $94.14 – $86.52

U.S. West Texas Intermediate crude oil futures are trading lower Monday, weighed down by plans to release record volumes of crude and oil products from the strategic reserves of several major oil consuming countries, and on continuing COVID-19 lockdowns in China, which could limit demand.

At 11:31 GMT, May WTI crude oil is trading $94.05, down $4.21 or -4.28%. On Friday, the United States Oil Fund ETF (USO) settled at $74.12, up $1.01 or +1.38%.

Last week, the International Energy Agency (IEA) member nations announced they will release 60 million barrels over the next six months, with the United States matching that as part of its 180 million barrel release announced in March, according to Reuters.

Meanwhile, with China implementing a “zero tolerance” policy for COVID-19, demand for oil will likely be affected.

Both events have prompted several major analysts to lower revisions in previous price estimates. Bank of America maintained its forecast for Brent crude to average $102 a barrel for 2022-23, but it cut its summer spike price to $120. Swiss investment bank UBS also lowered its June Brent forecast by $10 to $115 a barrel.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the main bottom at $92.20 will reaffirm the downtrend. The main trend will change to up on a trade through $105.59.

The main range is $61.86 to $126.42. The market is currently testing its retracement zone at $94.14 to $86.52. This zone is controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Monday is likely to be determined by trader reaction to $94.14.

Bearish Scenario

A sustained move under $94.14 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the main bottom at $92.20.

Taking out $92.20 will not only reaffirm the downtrend, but it could also trigger an acceleration into the long-term Fibonacci level at $86.52.

Bullish Scenario

A sustained move over $94.14 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into $98.26.

Overtaking $98.26 will put the market in a position to post a closing price reversal bottom. This could trigger a surge into the long-term Fibonacci level at $101.32.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Hovering Above Major Support at $94.14 – $86.52

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures edged higher on Friday, but this was not enough to turn the market higher for the week. The price action suggests the market may have already absorbed the planned release of crude from the strategic reserves of many oil consuming nations.

A weaker U.S. Dollar may have also contributed to the move. Since crude oil is a dollar-denominated asset, foreign demand tends to increase when the greenback declines.

On Friday, May WTI crude oil futures settled at $98.26, up $2.23 or +2.32%. June Brent crude oil closed at $102.78, up $2.20 or +2.14% and the United States Oil Fund finished at $74.12, up $1.01 or +1.38%.

Putting a cap on prices for most of the week was the news that member nations of the International Energy Agency (IEA) will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $93.81 will signal a resumption of the downtrend. A move through $105.59 will change the main trend to up.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is the major support controlling the longer-term direction of the market.

The intermediate range is $85.81 to $126.42. Its retracement zone at $101.32 to $106.12 is resistance.

The short-term range is $126.42 to $92.20. If the main trend changes to up then its retracement zone at $109.31 to $113.35 will become the next resistance area.

Short-Term Outlook

The direction of the May WTI crude oil market early Monday is likely to be determined by trader reaction to the main 50% level at $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a surge into the Fibonacci level at $101.32.

Since the main trend is down, look for sellers on the first test of $101.32. Overcoming it, however, could trigger a further rally into the main top at $105.59, followed by the 50% level at $106.12.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. Taking out $93.81 will indicate the selling pressure is getting stronger. This could lead to a test of the main bottom at $92.20.

A trade through $92.20 will change the main trend to down. This could trigger an acceleration to the downside with $86.52 the next major target.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Buyers Defending $94.14 – $86.52 Retrace Zone

U.S. West Texas Intermediate crude oil is edging lower on Friday as it heads to a second straight weekly loss after countries announced plans to release crude from their strategic stocks. A stronger U.S. Dollar also weighed on demand for dollar-denominated crude oil.

At 12:36 GMT, May WTI crude oil futures are trading $96.57, up $0.54 or +0.56%. On Thursday, the United States Oil Fund ETF (USO) settled at $73.11, up $0.06 or +0.08%.

The International Energy Agency (IEA) has listed members’ contributions to a 120-million-barrel release of crude and oil products from emergency stockpiles aimed at cooling global oil prices following Russia’s invasion of Ukraine.

The release of stocks by the U.S.-allied members of the IEA – which made up of 31 mostly industrialized countries, but does not include Russia – would be their second coordinated release in a month and the fifth in the agency’s history.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $93.81 will signal a resumption of the downtrend. The main trend will change to up on a move through the nearest main top at $105.59.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is major support. It stopped the selling at $92.20 on March 15. The zone is also controlling the longer-term direction of the market.

On the upside, the first resistance is the intermediate retracement zone at $101.32 to $106.12. The second resistance zone comes in at $109.31 to $113.35.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Friday is likely to be determined by trader reaction to the major 50% level at $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the Fibonacci level at $101.32. Overcoming this level could trigger an even stronger move into the main top at $105.59, followed by the 50% level at $106.12.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. Taking out yesterday’s low at $93.81 will indicate the selling is getting stronger.

Trader reaction to the March main bottom at $92.20 could set the tone next week. A trade through this level could trigger an acceleration into the main Fibonacci level at $86.52.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil in Position to Test Major Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading at a three-week low shortly before the mid-session on Thursday. The selling pressure is being fueled by the announcement of a huge release of oil from emergency reserves by some of the largest oil consuming nations.

At 15:26 GMT, May WTI crude oil is trading $95.06, down $1.17 or -1.22%. The United States Oil Fund ETF (USO) is at $71.69, down $1.36 or -1.86%.

International Energy Agency (IEA) member countries on Wednesday agreed to release 60 million barrels on top of a 180 million-barrel release announced by the United States last week to help drive down prices amid supply fears following Russia’s invasion of Ukraine.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $105.59 will change the main trend to up. The next downside target is the main bottom at $92.20.

The market is also trading on the weak side of the intermediate retracement zone at $101.32 to $106.12, making it resistance.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is the next target area. This zone stopped the selling at $92.20 on March 15.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market into the close on Thursday is likely to be determined by trader reaction to the main 50% level at $94.14.

Bearish Scenario

A sustained move under $94.14 will indicate the presence of sellers. The first downside target is the main bottom at $92.20. Taking out this level will reaffirm the downtrend with the next key target the main Fibonacci level at $86.52.

Bullish Scenario

A sustained move over $94.14 will signal the presence of buyers. This could trigger an intraday short-covering rally with the intermediate Fibonacci level at $101.32 the next potential target.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Firms as New Sanctions Offset Bearish Concerns

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday, recovering from earlier losses, as the threat of new sanctions on Russia renewed supply concerns. The move offset worries of weaker demand following a build in U.S. crude supplies and Shanghai’s extended lockdown.

At 10:49 GMT, May WTI crude oil is trading $103.35, up $1.39 or +1.36%. On Tuesday, the United States Oil Fund ETF (USO) settled at $74.78, down $2.08 or -2.71%.

The Bullish News

The United States and its allies on Wednesday prepared new sanctions on Moscow over civilian killings in northern Ukraine, which President Volodymyr Zelenskiy described as “war crimes.” Russia denied targeting civilians.

Proposed EU sanctions, which the bloc’s 27 member states must approve, would ban buying Russian coal and prevent Russian ships from entering EU ports. The head of the EU’s executive Ursula von der Leyen said the bloc was working on additional sanctions, including on oil imports.

The Bearish News

Demand worries mounted after authorities in top oil importer China extended a lockdown in Shanghai to cover all of the financial center’s 26 million people. Meanwhile, the stronger U.S. Dollar also made crude oil more expensive for holders of other currencies.

Prices were also pressured earlier by a surprise build in U.S. stockpiles. Late Tuesday, the American Petroleum Institute (API) reported a surprise U.S. crude oil inventory build of 1.08 million barrels for the week ended April 1. Analysts were expecting crude stocks to have fallen 2.88 million barrels for the same period. Additionally, distillate stocks climbed 593,000 barrels in the week, while gasoline stocks fell 543,000 barrels, the API data showed.

Daily May WTI Crude Oil

Daily Forecast

Traders will be seeking further guidance on stockpiles from the U.S. Energy Information Administration (EIA) report, due out later today at 14:30 GMT. According to the early estimate, traders are looking for the report to show a 2.9 million barrel draw in crude oil inventories.

Technically, the May WTI crude oil market is trying to establish a support base inside the intermediate retracement zone at $106.12 to $101.32.

Look for an upside bias to develop on a sustained move over $106.12. This could lead to a quick rally into a short-term retracement zone at $109.31 to $113.35.

A downside bias could develop on a sustained move under $101.32. This could trigger a break into the main bottom at $97.78. Taking out this level will change the main trend to down with the main retracement zone at $94.14 to $96.52 the next major target.

Overall, the tone is likely to be controlled by the extent of the new sanctions on Russia. However, another bearish surprise in the EIA report could also be the source of volatility.

For a look at all of today’s economic events, check out our economic calendar.