Crude Oil Price Update – Next Wave of Volatility Coming After API Report

U.S. West Texas Intermediate crude oil futures are trading sharply lower on Tuesday. The selling is being fueled by concerns about slowing global economic growth and another steep drop in the stock market. Prices were under pressure from the opening on supply concerns after Saudi Arabia’s energy minister sought for a second straight day to assure markets the kingdom will keep the world adequately supplied with crude.

At 1715 GMT, December WTI Crude Oil is trading $66.44, down $2.92 or -4.20%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down when sellers took out $67.74. It was further confirmed when the selling extended through $66.50. The next target is the August 16 main bottom at $63.48.

The market is in no position to change the main trend to up, but we are in the window of time for a closing price reversal bottom.

The main range is $63.48 to $76.72. Its retracement zone at $68.54 to $70.10 is controlling the near-term direction of the market. Today’s rout was triggered when sellers took out the lower or Fibonacci level at $70.10. Consider the zone resistance.

Daily Technical Forecast

Based on the current price at $66.44 and the earlier price action, the direction of the December WTI Crude Oil futures contract into the close is likely to be determined by trader reaction to the uptrending Gann angle at $66.42.

Holding $66.42 will indicate buyers are coming in late to support the market. This could lead to an intraday retracement. Potential upside resistance targets are $68.54 and a resistance cluster at $69.36 to $69.72.

Breaking through $66.42 and sustaining the move will signal the presence of sellers. If this creates enough downside momentum then look for the selling to continue into the next uptrending Gann angle at $64.95. This is the last potential support angle before the $63.48 main bottom.

The next move is likely to be fueled by the API report, due to come out at 2030 GMT. Crude oil stocks are seen up by 3.550 million barrels, while gasoline supplies are seen down 1.797 million barrels and distillates down by 2.375 million barrels.