Crude Oil Price Update – Needs to Hold $68.22 – $66.86 Retracement Zone to Sustain Upside Momentum

U.S. West Texas Intermediate crude oil futures are trading slightly lower on Thursday, but inside yesterday’s range. This suggests investor indecision and impending volatility. Volume is below average ahead of today’s government weekly inventories report. Meanwhile, a decline in U.S. Gulf of Mexico output following damages from Hurricane Ida continued to underpin the market.

At 09:14 GMT, December WTI crude oil is trading $68.64, down $0.06 or -0.09%.

Late Wednesday, a report from the American Petroleum Institute (API) showed that the crude oil drawdown for the week-ended September 3 was smaller than expected in a Reuters poll, but gasoline and distillate drawdowns were bigger than expected.

At 15:00 GMT (Note the time change), the U.S. Energy Information Administration (EIA) will release its weekly inventories report. It is expected to show that U.S. crude oil production fell by 200,000 barrels per day in 2021 to 11.08 bpd.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $69.95 will signal a resumption of the uptrend. The main trend will change to down on a trade through $61.11.

The minor trend is also up. A trade through $67.19 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is $72.61 to $61.11. The market is currently trading on the strong side of its retracement zone at $68.22 to $66.86, making it new support.

Daily Swing Chart Technical Analysis

The direction of the December WTI crude oil futures contract on Thursday is likely to be determined by trader reaction to $68.22.

Bullish Scenario

A sustained move over $68.22 will indicate the presence of buyers. Overcoming $68.57 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for a retest of $69.95. This is a potential trigger point for an acceleration to the upside with $71.85 – $72.61 the next potential target area.

Bearish Scenario

A sustained move under $68.22 will signal the presence of sellers. The first downside target is the minor bottom at $67.19, followed by a 50% level at $66.86 and another minor bottom at $66.65.

The minor bottom at $66.65 is a potential trigger point for an acceleration to the downside with $65.53 the next likely downside target.