Crude Oil Price Update – Found Support on 50% Level at $62.03 Ahead of EIA Report

U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday shortly ahead of the release of the U.S. Energy Information Administration (EIA) weekly inventories report at 14:30 GMT. Traders are looking for the report to show a 2.1 million barrel draw. However, yesterday’s American Petroleum Institute (API) weekly inventories report showed a surprise build of 2.4 million barrels. Therefore, traders should watch for unexpected news and heightened volatility.

AT 14:03 GMT, July WTI crude oil futures are trading $62.53, down $0.60 or -0.92%.

The market is also being pressed by a drop in demand for risky assets due to renewed tensions over U.S.-China trade relations.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A new main top was formed at $63.96. A trade through this level will change the main trend to up. A trade through the last main bottom at $60.10 will signal a resumption of the downtrend.

The short-term range is $60.10 to $63.96. Its 50% level or pivot at $62.03 stopped the selling earlier today at $62.05.

The main range is $66.44 to $60.10. Its retracement zone at $63.27 to $64.02 stopped the buying on Monday at $63.96.

The market is also trading inside the major retracement zone at $63.36 to $59.70. This zone is controlling the longer-term direction of the market. The 200-day moving average at $60.70 is additional support.

Daily Technical Forecast

Based on the early price action and the current price at $62.53, the direction of the June WTI crude oil market on Wednesday is likely to be determined by trader reaction to the pivot at $62.03.

Bullish Scenario

A sustained move over $62.03 will indicate the return of buyers. If this generates enough upside momentum then look for an intraday rally to possibly extend into $63.10 then $63.27 to $63.36.

Bearish Scenario

A sustained move under $62.03 will signal the return of sellers. The next downside target is an uptrending Gann angle at $63.82. Watch for a technical bounce on the first test of this angle. If it fails then look for the selling to possibly extend into the next uptrending Gann angle at $60.85.