Crude Oil Price Update – Major 50% Level at $59.70 Stops Rally Ahead of EIA Report

U.S. West Texas Intermediate crude oil futures are trading nearly flat shortly ahead of the release of the U.S. Energy Information Administration weekly inventories report at 15:00 GMT. The report is expected to show a 900,000 barrel draw. A bigger than expected draw should underpin prices. An unexpected build will be bearish.

At 14:41 GMT, July WTI crude oil futures are trading $58.67, down $0.14 or -0.24%.

Prices rose earlier in the session in response to bullish data from the American Petroleum Institute (API). However, the market gave back all of those gains.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $56.88 will signal a resumption of the downtrend. The main trend changes to up on a move through $63.96.

The resistance is a long-term 50% level at $59.70. This level stopped the rally earlier in the session.

Support is a 50% level at $55.32. This price represents value so look for buyers on a test of this level.

Daily Technical Forecast

Based on the earlier price action, the direction of the July WTI crude oil market on Thursday is likely to be determined by trader reaction to the 50% level at $59.70.

Bearish Scenario

A sustained move under $59.70 will indicate the presence of sellers. Turning lower for the session will indicate the selling is getting stronger. If this move creates enough downside momentum, then look for the selling to possibly extend into the long-term uptrending Gann angle at $57.58.

Look for a technical bounce on the first test of $57.58. If it fails then look for the selling to extend into the minor bottom at $56.88. Taking out this level could trigger an acceleration to the downside with the next major target the 50% level at $55.32.

Bullish Scenario

The inability to turn lower for the session will indicate the presence of buyers. This could trigger a rally into the 50% level at $59.70.

Overtaking $59.70 could lead to a test of the downtrending Gann angle at $59.94. Overtaking this angle will indicate the buying is getting stronger with the next target the downtrending Gann angle at $60.46, followed by the 200-day moving average at $60.56.