Crude Oil Price Update – Needs to Hold $68.83 to Sustain Upside Momentum

U.S. West Texas Intermediate crude oil futures are trading higher for a third session on Thursday on expectations for a surge in fuel demand amid a recovery in the global economy. The market is also absorbing OPEC+’s decision to continue with plans to ease supply curbs through July. Additional support is being provided by an industry report that showed a larger-than-expected draw in crude oil. However, gasoline and distillate inventories showed unexpected builds.

At 03:52 GMT, July WTI crude oil is at $69.25, up $0.42 or +0.61%.

Late Wednesday, one day later than usual, the American Petroleum Institute (API) reported a draw in crude oil inventories of 5.36-million barrels for the week-ending May 28. The API also reported that gasoline inventories rose 2.51 million barrels and distillate inventories rose 1.585-million barrels.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $69.40 will signal a resumption of the uptrend.

The main trend will change to down on a move through $61.56. This is highly unlikely, but since the market is up eight days from the last main bottom, the session begins with crude oil inside the window of time for a closing price reversal top.

The minor range is also up. A trade through $65.25 will change the minor trend to down. This will also shift momentum to the downside.

The new minor range is $65.25 to $69.40. Its retracement zone at $67.33 to $66.84 is the first downside target. Since the main trend is up, buyers could come in on a test of this area.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil market on Thursday is likely to be determined by trader reaction to $68.83.

Bullish Scenario

A sustained move over $68.83 will indicate the presence of buyers. Taking out the intraday high at $69.40 will reaffirm the uptrend and could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $68.83 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to eventually extend into $67.33 to $66.84.

Side Notes

A close under $68.83 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

Look for volatility on Thursday at 15:00 GMT, following the release of the U.S. Energy Information Administration (EIA) weekly inventories report.