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Crude Oil Price Update – Late Session Buying Spree Turns WTI Higher for Week

By:
James Hyerczyk
Updated: May 15, 2022, 05:12 UTC

The direction of July WTI crude oil into the close on Friday will be determined by trader reaction to $105.77.

WTI Crude Oil

July West Texas Intermediate crude oil futures are up over 4% late in the session on Friday, riding a bullish wave of news as U.S. gasoline prices spiked to a record high and China looked ready to ease pandemic restrictions.

Although the market is still trading lower for the week, the price action suggests there may be for upside into the close or early next week as bullish traders celebrate a rare combination of both supply and demand-related news.

Oil Traders Ignore Weak US Economic Data

While reacting positively to the supply and demand news, oil traders shrugged off data showing U.S. import prices were unexpectedly flat in April as a decline in petroleum costs offset gains in food and other products, a further sign that inflation has probably peaked.

Furthermore other data from the University of Michigan showed its preliminary reading of consumer sentiment for early May deteriorated to its lowest level since August 2011 as concerns about inflation persisted.

The import price data is stale and more importantly, energy costs are up in May. Secondly, consumer confidence could move even lower due to persistent inflation. This could lead to lower retail spending or even less travel – all of which points toward a slowing economy.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.77 will reaffirm the uptrend with the main to top at $110.07 the next target. A move through $96.93 will change the main trend to down.

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.

Short-Term Outlook

The direction of July WTI crude oil into the close on Friday will be determined by trader reaction to $105.77.

Bullish Scenario

A sustained move over $105.77 late in the session on Friday will indicate the buying is getting stronger. If this creates enough upside momentum into the close, we could see a breakout over the pair of main tops at $109.77 and $110.07. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $105.77 will signal the return of sellers. The move will also indicate that traders are still selling rallies. However, it’s going to take a lot of pressure to break this market late Friday since support is lined up at $102.48, $100.96 and $98.88.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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