Crude Oil Price Update – Needs to Overcome $66.15 or Could Retreat to $64.65

U.S. West Texas Intermediate crude oil futures are trading sharply higher shortly after the cash market opening. Prices surged earlier in the session when the news hit the market that the Trump Administration will reportedly announce that it will no longer grant sanctions waivers to any country that is currently importing Iranian oil.

At 13:42 GMT, June WTI crude oil is trading $65.57, up $1.49 or +2.34%.

The move is expected to further tighten global supplies, however, traders are worried that Saudi Arabia may raise production in order to stabilize the market. This could limit gains and drive prices back toward support.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out $64.72. Given the three minor tops at $64.72, $64.71 and $64.70, these three areas are new support. The main trend will change to down on a trade through $63.15.

The minor trend is also up. A trade through $63.55 will change the minor trend to down. This will also shift momentum to the downside.

The major support is the long-term Fibonacci level at $63.48.

Daily Technical Forecast

Based on the early price action, the direction of the June WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the steep uptrending Gann angle at $66.15.

Bullish Scenario

Overtaking and sustaining a rally over $66.15 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the next downtrending Gann angle at $67.08.

Bearish Scenario

The inability to overcome $66.15 will signal the presence of sellers. If this move is able to generate enough downside momentum, we could see a pullback into a pair of uptrending Gann angles at $64.65 and $64.42. Since the main trend is up, buyers could come in on a test of these angles.

Look for heightened volatility due to the breaking news. If the Saudi’s announce a production increase then look for a sell-off into support.