Crude Oil Price Update – Rangebound; Strengthens Over $69.02, Weakens Under $67.63
U.S. West Texas Intermediate crude oil futures finished lower on Tuesday, posting its first monthly loss since March, on forecasts calling for a drop in demand after Hurricane Ida shut down U.S. Gulf Coast refineries. For the month of August, U.S. crude fell 7%. Traders were also bracing for more crude from OPEC and its allies.
To recap the key event so far this week, Hurricane Ida, which made landfall in the United States on Sunday as a Category 4 hurricane, knocked out at least 94% of offshore Gulf of Mexico oil and gas production and caused “catastrophic” damage to Louisiana’s grid.
Prices were pressured by concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries.
In other news, OPEC and its allies had agreed to add 400,000 bpd to monthly supply until the end of December. Sources told Reuters the group is likely to maintain that plan despite U.S. pressure for more output.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $69.64 will signal a resumption of the uptrend. A move through $61.74 will change the main trend to down.
The short-term range is $73.52 to $61.74. The market is currently testing its retracement zone at $67.63 to $69.02.
On the downside, the support is a major retracement zone at $65.51 to $63.32.
Daily Swing Chart Technical Forecast
The direction of the October WTI crude oil market on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at $69.02.
A sustained move over $69.02 will indicate the presence of buyers. The first upside target is Monday’s high at $69.64. This is a potential trigger point for an acceleration to the upside with $73.52 the next major upside target.
A sustained move under $69.02 will signal the presence of sellers. The first downside target is the short-term 50% level at $67.63.
Taking out $67.63 could trigger an acceleration to the downside with the next target a potential support cluster at $65.69 to $65.51.