Crude Oil Price Update – Firms After EIA Reports Larger-than-Expected Drawdown

U.S. West Texas Intermediate crude oil prices are trading higher following the release of a government report that showed a larger-than-expected draw down in U.S. supply. The news lifted prices to a new intraday high. Earlier in the session, the market was underpinned by the hope that a meeting between U.S. President Trump and China President Xi Jinping would lead to an eventual deal to end the long-standing trade dispute.

At 14:41 GMT, August WTI crude oil futures are trading $54.34, up $0.23 or +0.46%.

According to the U.S. Energy Information Administration, crude inventories fell by 3.1 million barrels during the week-ending June 14. Traders were looking for a 1.5 million barrel draw down.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $54.99 will change the main trend to up. The next upside target is a retracement zone.

A move through $50.98 will signal a resumption of the downtrend. A trade through $50.79 will reaffirm the downtrend.

The short-term range is $50.79 to $54.99. Its retracement zone at $52.89 to $52.39 is support.

The main range is $64.03 to $50.79. If the trend changes to up then its retracement zone at $57.41 to $58.97 will become the primary upside target.

Daily Technical Forecast

August WTI crude oil is currently trading on the strong side of a downtrending angle at $53.53. This angle had been guiding the market lower since May 20 so crossing to its strong side has put the market in a potentially bullish position.

Based on the early price action the direction of the August WTI futures contract will likely be determined by trader reaction to the downtrending Gann angle at $53.53 and the short-term uptrending Gann angle at $53.29.

Bullish Scenario

A sustained move over $53.53 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the main top at $54.99.

Taking out $54.99 will change the main trend to up. This could trigger a breakout to the upside with the next potential target coming in at $57.41.

Bearish Scenario

Falling below $53.53 will signal the presence of sellers. Taking out $53.29 will indicate the selling is getting stronger. This could trigger a labored break into multiple levels including $52.89, $52.39 and $52.04. These are followed by $51.42, $50.98 and $50.79.

Overview

It looks as if a support base has been built so traders may take a run at $54.99.