Crude Oil Price Update – Bulls Need to Come in at $64.92 to $64.77 or Reversal Bottom Likely to Fail

U.S. crude oil futures are trading lower after giving up earlier gains. Traders are squaring up positions ahead of today’s U.S. Energy Information Administration’s weekly inventories report. It is expected to show a draw of about 2.0 million barrels.

At 1124 GMT, July West Texas Intermediate crude oil futures are trading $65.10, down $0.42 or -0.65%.

Yesterday, the market spiked higher after the American Petroleum Institute (API) report showed a bigger-than-expected drawdown. It was also supported by reports that Venezuela raised the prospect of a halt to some crude exports. Today’s gains were capped by reports that the U.S. government had asked Saudi Arabia and some other OPEC producers to increase output.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside, at least temporarily, with the formation of a closing price reversal bottom on Tuesday and the subsequent follow-through rally earlier today.

A trade through $64.22 will negate the chart pattern and signal a resumption of the downtrend.

The minor trend will change to up on a move through the minor swing top at $68.67.

On the downside, support is a 50% cluster at $64.92 and $64.77. This is followed by a Fibonacci level at $63.03.

On the upside, resistance is a Fibonacci level at $66.00, followed by 50% levels at $66.45, $67.32 and $68.56.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the July WTI crude oil futures market the rest of the session will be determined by trader reaction to the 50% levels at $64.92 and $64.77.

Holding $64.92 will indicate the presence of buyers. If this generates enough upside momentum, we could see a retest of $66.00. Overcoming this level could trigger a fast move into $66.45 then $67.32.

A sustained move under $64.77 will signal the presence of sellers. This could drive the market into $64.22. If this price fails then look for the selling to extend into possibly $63.03.