Crude Oil Price Update – Bullish WTI Traders Targeting $116.43 – $121.17

U.S. West Texas Intermediate crude oil futures are trading at a seven week high on Tuesday. The catalysts behind the rally are the European Union’s ongoing push for a ban on Russian oil imports that would tighten supply and the possible easing of China’s COVID lockdowns that would drive demand higher.

So essentially, it’s the best of both worlds for crude oil bulls with both supply and demand positioned to drive prices higher. The market is likely to continue to rally until it reaches the highly elusive supply and demand balance point.

At 12:29 GMT, July WTI crude oil futures are trading $111.68, down $0.14 or -0.13%. On Monday, the United States Oil Fund ETF (USO) settled at $83.11, up $1.83 or +2.25%.

Also in focus late Tuesday and early Wednesday are potential further declines in U.S. fuel inventories. Weekly inventory reports are expected to show a rise in crude stocks and declines in inventories of distillates and gasoline.

U.S. gasoline prices are currently trading at all-time highs due to low stockpiles. Furthermore, gasoline inventories are expected to drop further as the nation prepares for the start of the summer driving season.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $113.20 will signal a resumption of the uptrend. A move through the March 7 main top at $116.43 will reaffirm the uptrend. The main trend will change to down on a move through $96.93.

The short-term range is $116.43 to $88.53. The market is currently trading on the strong side of its retracement zone at $105.77 to $102.48, making it support.

Daily Swing Chart Technical Forecast

Trader reaction to $111.57 is likely to determine the direction of the July WTI crude oil futures contract on Tuesday.

Bullish Scenario

A sustained move over $111.57 will indicate the presence of buyers. Taking out $113.20 will indicate the buying is getting stronger. This could trigger a late session surge into $116.43.

Bearish Scenario

A sustained move under $111.57 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at $105.77.

Side Notes

A close under $111.68 will form a closing price reversal top. If confirmed, this could lead to the start of a 2 to 3 day correction.