Crude Oil Price Update – Pivot at $61.79 Controlling Direction Today

Based on the early price action, the direction of the July WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to the short-term pivot at $61.79.
James Hyerczyk
EIA Oil Report

U.S. West Texas Intermediate crude oil futures are under pressure on Wednesday shortly before the release of the U.S. Energy Information Administration (EIA) Weekly inventories report. The catalyst behind the early weakness is the larger-than-expected build reported by the American Petroleum Institute late Tuesday. Concerns over a slowing global economy are also weighing on prices after the U.S. and China reported weaker than expected industrial production figures.

At 14:18 GMT, July WTI crude oil is trading $61.57, down $0.41 or -0.68%.

At 14:30 GMT, the EIA report is expected to show inventories were flat the week-ending May 10 after plunging 4 million barrels the prior week.

Daily July WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $60.10 will signal a resumption of the downtrend. Taking out $63.48 will shift momentum to the upside.

The market is trading inside a major retracement zone at $59.70 to $63.36. This zone is controlling the longer-term direction of the market.

Daily Technical Forecast

Based on the early price action, the direction of the July WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to the short-term pivot at $61.79.

Bullish Scenario

A sustained move over $61.79 will indicate the presence of buyers. This could trigger a rally into the downtrending Gann angle at $62.44.

Look for sellers on the first test of $62.44. Watch for a breakout to the upside if buyers can take out this angle. If this creates enough upside momentum then look for the rally to possibly extend into $63.36 to $63.48.

Bearish Scenario

A sustained move under $61.79 will signal the presence of sellers. A move through $60.81 will indicate the selling is getting stronger. This could trigger a break into $60.10 then $59.70.

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