Crude Oil Price Update – $69.62 – $68.53 Retracement Zone Controls Near-Term DirectionThe direction of the September WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to $70.54.
U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday as growing concerns over potential demand destruction in the United States and China, due to the spread of the coronavirus Delta variant, offset potentially bullish geopolitical developments in the Middle East and another draw in domestic oil inventories.
At 11:15 GMT, September WTI crude oil futures are trading $69.72, down $0.84 or -1.19%.
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According to the American Petroleum Institute (API), U.S. crude inventories fell by 879,000 barrels for the week ended July 30. Gasoline inventories fell by 5.8 million barrels and distillate stocks fell by 717,000 barrels, the data showed.
Official Energy Information Administration numbers are due later on Wednesday at 14:30 GMT. Traders are looking for a draw of 3.2 million barrels.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $69.19 will signal a resumption of the downtrend. A move through $74.23 will change the main trend to up.
The minor range is $65.01 to $74.23. The market is currently testing its retracement zone at $69.62 to $68.53. This zone stopped the selling on Monday at $69.19. Buyers bought on a test of this zone because it represents value. No one wants to overpay with so many issues to overcome.
The major support zone is $66.35 to $64.05. This zone stopped the selling on July 20 at $65.01.
The short-term range is $76.07 to $65.01. Its retracement zone at $70.54 to $71.85 is resistance.
Daily Swing Chart Technical Forecast
The direction of the September WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to $70.54.
A sustained move under $70.54 will indicate the presence of sellers. This could drive the market into a series of levels at $69.62, $69.19 and $68.53.
Taking out $68.53 could trigger an acceleration to the downside with the next targets lined up at $66.35, $65.01 and $64.05.
A sustained move over $70.54 will signal the presence of buyers. If this move creates enough upside momentum then look for the buying to possibly extend into $71.85.
Since the main trend is down and the fundamentals are leaning to the bearish side, sellers are likely to step in on rallies.