Crude Oil Price Update – Near-Term Direction Controlled by $68.46 to $67.59

West Texas Intermediate crude oil futures are trading slightly better early Wednesday on concerns over supply. The market is recovering from an early setback fueled by the American Petroleum Institute’s weekly inventories report which showed a surprise oil inventory build of 38,000 barrels during the week-ending August 25. Later today, investors will get the opportunity to react to the latest U.S. Energy Information Administration’s weekly inventories data.

At 0614 GMT, October WTI crude oil is trading $69.01, up $0.14 or +0.20%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $69.31 will signal a resumption of the uptrend.

The market is not in a position to change the trend to down, but it is in the window of time for a potentially bearish closing price reversal top. This pattern usually indicates the selling is greater than the buying at current price levels. It often leads to a 2 to 3 day correction.

The main range is $71.29 to $63.89. Its retracement zone is $68.46 to $67.59. This zone is currently trading on the strong side of this zone, giving it an upside bias. The two levels are new support.

Daily Swing Chart Technical Forecast

Based on the current price at $69.01, the direction of the October WTI crude oil market today is likely to be determined by trader reaction to the Fib level at $68.46.

A sustained move over $68.46 will indicate the presence of buyers. If this generates enough upside momentum then look for buyers to make a run at $69.31.

Taking out $69.31 will signal a resumption of the uptrend. The daily chart indicates there is plenty of room to the upside with a pair of tops at $71.05 and $71.29 the next likely upside targets. However, we’re not likely to get there unless the volume increases.

A sustained move under $68.46 will signal the presence of sellers. This could trigger a move into the 50% level at $67.59. If this level fails as support then look for increased selling pressure.