Crude Oil Price Update – Pressured by Rise in OPEC Supplies

August West Texas Intermediate crude oil futures are trading lower on Wednesday. Traders are reacting to another rise in OPEC supplies. Earlier today, OPEC reported that oil exports rose for a second month in June. OPEC exported 25.92 million barrels per day (bpd) in June, 450,000 bpd above May and 1.9 million bpd more than a year earlier.

Technical Analysis

The main trend is up according to the daily swing chart. However, the market is trading lower after completing a 50% retracement of its last major break. A trade through $47.32 will signal a resumption of the uptrend.

The main range is $52.22 to $42.05. It retracement zone is $47.14 to $48.34. After testing this zone earlier in the week, the market is now trading on the weak side of the retracement zone, suggesting the return of sellers.

Forecast

Based on the current price at $46.40 and the earlier price action, the direction of the crude oil market today is likely to be determined by trader reaction to the price cluster at $47.05 to $47.14.

A sustained move under the uptrending angle at $47.05 will indicate the presence of sellers. The daily chart is wide open to the downside so we could see the start of a steep sell-off with the next major targets coming in at $45.22, $44.69 and $44.55.

Overcoming $47.14 will signal the return of sellers. This could create enough upside momentum to takeout the minor top at $47.32 and challenge the Fibonacci level at $48.34.

Look for a bearish tone today as long as crude oil remains under $47.05. A bullish bias should develop on a sustained move over $47.14.