Crude Oil Price Update – Near-Term Strength Over $73.79, Weakness Under $73.08

U.S. West Texas Intermediate crude oil futures are trading higher for a second session late Friday as traders continued to react to yesterday’s government report that showed a larger-than-expected drawdown. Signs of strong Asian demand from both China and India also strengthened the market.

U.S. crude and gasoline stocks fell and gasoline demand reached its highest since 2019, the U.S. Energy Information Administration said on Thursday, signaling increasing strength in the economy.

At 19:14 GMT, September WTI crude oil is trading $73.90, up $1.68 or +2.33%.

Despite the two-day rally, the market is still lower for the week. Today’s gains are likely being capped by continued worries over whether some OPEC+ members would eventually abandon output limits after negotiations over new production limits collapsed earlier in the week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart a trade through $70.10 will signal a resumption of the downtrend. A move through $76.07 will change the main trend to up.

The minor range is $76.07 to $70.10. Its retracement zone at $73.08 to $73.79 is currently being tested. Sellers are trying to form a secondary lower top, while buyers are trying to sustain the upside momentum.

On the downside, the first potential support at $71.96 held earlier today. Additional support is at $70.33. This is followed by the main support zone at $68.57 to $66.79.

Short-Term Outlook

The direction of the September WTI crude oil futures contract into the close on Friday is likely to be determined by trader reaction to $73.79.

Bullish Scenario

A sustained move over $73.79 will indicate the presence of buyers. If this move is able to generate enough upside momentum over the near-term then look for buyers to challenge the contract high at $76.07.

Bearish Scenario

A sustained move under $73.79 will signal the presence of sellers. The first target is $73.08. If this fails then look for the selling to possibly extend into $71.96.

The pivot at $71.96 is a potential trigger point for an acceleration into $70.33, followed by $70.10.