Crude Oil Price Update – Concerns Over Size of Gulf Exports Limiting Gains

U.S. West Texas Intermediate crude oil futures are trading slightly higher on Tuesday, the market has come down a little after posting strong gains earlier in the session in reaction to a possible strike by Norwegian oil workers. Most of the gain, however, is centralized in the Brent futures contract.

At 1222 GMT, August WTI crude oil futures are trading $74.12, up $0.27 or +0.37%.

Prices are also being underpinned by renewed geopolitical supply-side disruptions from Canada, Venezuela, Libya and Iran. Uncertainty over exports from Saudi Arabia and Russia may be helping to limit gains as well as increased production from the United States.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $75.27 will signal a resumption of the uptrend. The main trend will change to down on a move through $72.14.

The short-term range is $75.27 to $72.14. Its 50% level or pivot at $73.71 is controlling the price action.

On the downside, the first support is a Fibonacci level at $70.51, followed by a support zone at $69.34 to $67.93.

Daily Technical Forecast

Based on the early trade and the current price at $74.12, the direction of the August WTI crude oil futures contract today is likely to be determined by trader reaction to the pivot at $73.71.

A sustained move over $73.71 will indicate the presence of buyers. This could lead to a labored rally with downtrending resistance angles coming in at $74.27 and $74.77. The latter is the last potential resistance angle before the $75.27 main top.

A move through $75.27 will signal a resumption of the uptrend. The daily chart shows there is plenty of room to rally above this level with potential targets the November 21, 2014 top at $79.72 and the November 3, 2014 potential top at $81.09.

A sustained move under $72.71 will signal the presence of sellers. This could trigger an acceleration to the downside with $72.14 the next target.

Taking out $72.14 will change the main trend to down. This could lead to a test of the uptrending Gann angle at $70.90.