Crude Oil Price Update – Bearish Under $73.68, Bullish Over $74.12

U.S. West Texas Intermediate crude oil futures are trading steady early Wednesday after plunging the previous session, following the cancellation of talks between OPEC+ producers that raised the prospect that the world’s major crude exporters will turn on the taps to gain market share. Energy ministers from OPEC and its allies including Russia ended talks on supply policy on Monday.

At 04:39 GMT, September WTI crude oil futures are trading $72.66, up $0.08 or +0.11%.

Divisions between Saudi Arabia, the biggest OPEC producer, and the United Arab Emirates (UAE), which opposed extending supply constraints designed to support prices after the fall in demand from the pandemic, were the main reason behind the failure of the discussions.

Later on Wednesday at 20:30 GMT, the American Petroleum Institute (API) will release its weekly crude oil and gasoline inventories figures.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside with the formation of a potentially bearish closing price reversal top on Tuesday.

A trade through $72.16 will confirm the closing price reversal top and shift momentum to the downside. The main trend will change to down on a move through $71.28. A move through $76.07 will negate the chart pattern and signal a resumption of the uptrend.

On the upside, a pair of 50% levels at $73.68 and $74.12 are potential resistance levels.

On the downside, potential support is a pair of 50% levels at $71.96 and $70.33.

The main range is $61.06 to $76.07. If the main trend changes to down then its retracement zone at $68.57 to $66.79 will become the primary target area.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market on Wednesday is likely to be determined by trader reaction to $73.68 and $74.12.

Bullish Scenario

A sustained move over $74.12 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $76.07.

Bearish Scenario

A sustained move under $73.68 will signal the presence of sellers. The first down side targets are $72.16 and $71.96, followed closely by the main bottom at $71.28.

Taking out $71.28 will change the main trend to down, leading to a test of $70.33. This is a potential trigger point for an acceleration into $68.57 to $66.79.

Side Notes

Look for heightened volatility over the near-term. Prices could spike higher if OPEC+ decides to return to the negotiation table, or plunge if traders decide to liquidate long positions due to uncertainty and the lack of clarity.