Crude Oil Price Update – Market Crossed to Strong Side of 200-day MA at $58.15

U.S. West Texas Intermediate crude oil futures finished higher on Wednesday, boosted by a larger-than-expected draw down in crude oil inventories, according to a government report. According to the U.S. Energy Information Administration (EIA) weekly inventories report, crude inventories fell 8.5 million barrels in the week-ended July 26. Traders were looking for a decrease of 2.6 million barrels.

On Wednesday, September WTI crude oil futures settled at $58.58, up $0.53 or +0.91%.

After hitting an intraday high at $58.82 shortly after the report, traders started to take profits later in the session after the U.S. Federal Reserve dampened hopes of additional rate cuts later this year.

Daily Swing Chart Technical Forecast

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $58.82 will signal a resumption of the uptrend. The main trend will change to down on a trade through $54.85.

The minor trend is up. This is controlling the momentum. A trade through $55.33 will change the minor trend to down.

The main range is $65.92 to $50.91. Its retracement zone at $58.41 to $60.18 is resistance.

The intermediate range is $64.02 to $50.91. Its retracement zone is currently being tested.

The short-term range is $50.91 to $61.02. Its retracement zone at $55.97 to $54.77 is potential support.

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at $58.58, the direction of the September WTI crude oil market on Thursday is likely to be determined by trader reaction to the 50% level at $58.41.

Bullish Scenario

A sustained move over $58.41 will indicate the presence of buyers. The next target is the Fibonacci level at $59.01. Sellers could come in on the first test of this level, but overtaking it could trigger an acceleration to the upside with $60.18 the next major target.

Bearish Scenario

A sustained move under $58.41 will signal the presence of sellers. This could lead to a pullback into a 50% level at $57.47. This is a potential trigger point for an acceleration to the downside with the next target the 50% level at $55.97.

Overview

The market closed on the strong side of the 200-day Moving Average at $58.15 so we could see some strong buying if this price holds as support.