Crude Oil Price Update – API Gasoline Inventory Data Could Fuel Late Session Volatility

U.S. West Texas Intermediate crude oil futures are inching lower late Tuesday after posting a two-sided trade most of the session. The market was down from the opening but recovered those earlier losses after the U.S. energy secretary said Washington has not ruled out export restrictions to lower fuel prices. Capping gains, however, were concerns over a possible recession and China’s COVID-19 lockdowns.

At 19:02 GMT, July WTI crude oil is at $110.33, up $0.04 or +0.04%. The United States Oil Fund ETF (USO) is trading $82.18, up $0.21 or +0.26%.

In other news, the American Petroleum Institute’s (API) weekly inventory report will be in focus at 20:30 GMT for a read on demand. Analysts expect lower gasoline and crude inventories.

U.S. gasoline demand is expected to jump with the start of the summer driving season this weekend. Memorial Day weekend travel is expected to be the busiest in two years as more drivers hit the road and shake off coronavirus lockdowns despite high pump prices.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on May 17.  A trade through $113.20 will signal a resumption of the uptrend. A move through $103.24 will change the main trend to down.

The minor trend is up. However, a new minor top has formed at $111.96.

The minor range is $113.20 – $103.24. Its pivot at $108.22 is potential support.

The short-term range is $116.43 to $88.53. Its retracement zone at $105.77 to $102.48 is support. This area is also controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Trader reaction to $108.22 is likely to determine the direction of the July WTI crude oil market into the close on Tuesday.

Bullish Scenario

A sustained move over $108.22 will indicate the presence of buyers. If this creates enough upside momentum, we could see a breakout over the minor top at $111.96 with the main top at $113.20 the next target.

Bearish Scenario

A sustained move under $108.22 will signal the presence of sellers. This could trigger a quick break into $105.77. A failure to hold this level will be a sign of weakness.

Side Notes

Today’s API weekly inventories report could be the catalyst behind any late session volatility. The gasoline and distillate numbers will be particularly interesting to watch. A bullish report could trigger a late session breakout to the upside.