Crude Oil Price Update – Aggressive Counter-Trend Buyers Respecting $69.62 – $68.53 Retracement Zone

U.S. West Texas Intermediate crude oil futures plunged for a second session on Tuesday as fear that the rising cases of the Delta coronavirus variant could lead to demand destruction at a time when OPEC and its allies are raising production offset expectations of a lower U.S. inventories in today’s American Petroleum Institute’s (API) inventories report.

At 14:55 GMT, September WTI crude oil futures are trading $69.88, down $1.38 or -1.94%.

“The oil market continues to alternate between concerns about tight supply on the one hand and about looming demand outages on the other,” Commerzbank analysts said.

Meanwhile, a preliminary Reuters poll showed U.S. crude and product inventories likely declined last week, with both distillates and gasoline stockpiles predicted to have fallen for a third straight week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $74.23 will change the main trend to up. A move through $65.01 will signal a resumption of the downtrend.

The minor trend is also down. It changed to down earlier today when sellers took out the last minor bottom at $70.56. This shifted momentum to the downside.

The market also formed another secondary lower top at $74.23, reaffirming the weakness.

The minor range is $65.01 to $74.23. Buyers came in on a test of its retracement zone at $69.62 to $68.53. This was expected.

The short-term range is $76.07 to $65.01. Its retracement zone at $70.54 to $71.85 is new resistance.

The major support is the retracement zone at $66.35 to $64.05.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market into the close is likely to be determined by trader reaction to $69.62.

Bullish Scenario

A sustained move over $69.62 will indicate the presence of buyers. If this move attracts enough upside momentum then look for a late session rally into $70.54, followed by $71.85.

Bearish Scenario

A sustained move under $69.62 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $68.53. This is a potential trigger point for an acceleration to the downside with $66.35 the next major downside target.