WTI Crude Oil

Crude Oil Price Update – Trend Up, but Close Under $72.05 Could Lead to 2 -3 Day Setback

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday, shortly before the release of the U.S. government’s weekly inventories report. The market is being supported by rising demand expectations and a bullish industry report that reinforced views of a tightening market as travel picks up in the United States and Europe.

At 09:11 GMT, September WTI crude oil is trading $72.66, up $0.61 or +0.85%.

The American Petroleum Institute (API) late Tuesday reported a draw in crude oil inventories of 7.199-million barrels for the week ending June 18. Analysts were looking for a much smaller draw of 3.942 million barrels for the week.

The API also reported another build in gasoline inventories of 959,000 barrels for the week-ending June 18. Analysts had expected a build of 833,000-barrels for the week. Distillate stocks saw an increase in inventories this week of 992,000 barrels for the week.

Later today at 14:30 GMT, the Energy Information Administration (EIA) is expected to report a 3.6 million barrel draw down in crude oil inventories.

In other news, perhaps putting a lid on prices are worries that OPEC+ may decide to increase oil output in August at its next monthly meeting on July 1.

Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $72.77 will reaffirm the uptrend. A move 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.

A closing price reversal top won’t change the main trend to down, but if confirmed, it could lead to the start of a 2 to 3 day correction. Additionally, given the bullish fundamentals, we expect any pullbacks to be short in nature.

The first minor range is $68.86 to $72.77. Its 50% level at $70.82 is the nearest support. This level will up as the market moves higher.

The second minor range is $67.84 to $72.77. Its 50% level at $70.31 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market on Wednesday will likely be determined by trader reaction to $72.05.

Bullish Scenario

A sustained move over $72.05 will indicate the presence of buyers. Taking out $72.77 will indicate the buying is getting stronger. There is no resistance at this time, only potential upside targets like the psychological $75.00 level.

Bearish Scenario

A sustained move under $72.05 will signal the presence of sellers. If this move creates enough near-term momentum then look for the selling to possibly extend into the pair of pivots at $70.82 and $70.31.

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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.