Crude Oil Price Update – Potentially Bearish Secondary Higher Top May Be Forming

U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday after a private industry report revealed an unexpected rise in U.S. crude inventories. However, losses were likely being limited by escalating political turmoil in Venezuela, tightening supplies due to the expanded sanctions against Iran and the OPEC-led production cuts that have been guiding prices higher since the first of the year.

At 04:37 GMT, June WTI crude oil futures are trading $63.34, down $0.57 or -0.88%.

Daily Technical Analysis

The main trend is down according the daily swing chart. The trend turned down last Friday when sellers took out the previous main bottom at $63.15. A trade through $62.28 and $61.92 will signal a resumption of the downtrend. The main trend will change to up when buyers take out $66.60.

The minor trend is also down. Based on the early price action, a trade through $64.75 will change the minor trend to up.

The main range is $58.41 to $66.60. Its retracement zone at $62.51 to $61.54 is support. This zone stopped the selling earlier in the week at $62.28.

The short-term range is $66.60 to $62.28. Its retracement zone at $64.44 to $64.95 is resistance. This zone stopped the rally on Tuesday at $64.75.

The major retracement zone is $59.73 to $63.48. This zone is controlling the longer-term direction of the WTI crude oil market.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the June WTI crude oil market the rest of the session is likely to be determined by trader reaction to the major Fibonacci level at $63.48.

Bullish Scenario

A sustained move over $63.48 will indicate the presence of buyers. If this move creates enough upside momentum, then look for a possible retest of the short-term 50% level at $64.44, followed by the short-term Fibonacci level at $64.65.

Bearish Scenario

A sustained move under $63.48 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main 50% level at $62.51.If this fails then sellers are going to go after $62.48, $61.92 and $61.54.

The most bearish development this week was the possible secondary higher top on Tuesday at $64.75.