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James Hyerczyk
WTI Crude Oil

U.S. West Texas Intermediate crude oil futures are trading lower late in the session on Friday as an escalation in U.S.-China tensions encouraged traders to book profits ahead of the long U.S. holiday weekend. The problems between the two economic powerhouses raised doubts about how quickly fuel demand would recover from the coronavirus crisis.

At 19:18 GMT, July WTI crude oil is trading $32.96, down $0.96 or -2.83%.

Fuel demand plummeted as the coronavirus pandemic caused governments to impose restrictions on movement and businesses closed their doors.

In a sign of the glut easing, U.S. crude inventories fell last week according to the U.S. Energy Information Administration (EIA). Gasoline demand is rising and some airlines are planning for a return of European travel.

In other news, energy services firm Baker Hughes reported that the U.S. rig count fell by 21 to a record low 318 in the week to May 22.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through $35.18. A move through $17.27 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. A trade through $24.38 will change the minor trend to down.

The main range is $54.86 to $17.27. Its retracement zone at $36.07 to $40.50 is the primary upside target.

The short-term range is $35.18 to $17.27. Its retracement zone at $28.34 to $26.23 is the nearest support zone.


Short-Term Outlook

Friday’s steep plunge early in the session didn’t do any major damage to the chart pattern. The lower-low did create a minor top at $34.66. Shortly before the close, the market has regained more than 50% of its earlier losses.

If buyers regain control over the short-run then look for the rally to extend into the main top at $35.18 and the main 50% level at $36.07. Sellers could come in on a test of these levels.

If the concerns over demand continue then look for the selling that began on Friday to drive the market into at least $28.34 over the short-run.

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