Crude Oil Price Update – Overtaking $69.64 Could Spike Price to $70.42 – $70.61

September West Texas Intermediate crude oil futures are trading higher shortly after the regular session opening. The rally is being driven by an OPEC report that showed lower production than expected from Saudi Arabia in July.

Saudi Arabia pumped around 10.29 million barrels per day (bpd) of crude in July, two OPEC sources said on Friday, down about 200,000 bpd from a month earlier.

Traders are also anticipating an announcement from Washington later on Monday on renewed U.S. sanctions against major oil exporter Iran. So called “snapback” sanctions are due to be reinstated at 0401 GMT on Tuesday, according to a U.S. Treasury official.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $70.43 will change the main trend to up. A move through $66.92 will signal a resumption of the downtrend.

The main range is $62.99 to $72.98. Its retracement zone at $67.99 to $66.81 is support.

The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance.

Daily Technical Forecast

Based on the early price action, the direction of the September WTI crude oil futures market is likely to be determined by trader reaction to the 50% level at $69.64.

A sustained move under $69.64 will indicate the presence of sellers. If this move creates enough downside momentum, we could see a break into the support cluster at $67.99 to $67.92.

Overtaking and sustaining a rally over $69.64 will signal the presence of buyers. This could trigger an acceleration into a cluster of levels including a Fibonacci level at $70.42, a main top at $70.43 and a downtrending Gann angle at $70.61.