Crude Oil Price Update – Ready to Resume Bullish Tone, or Form Secondary Lower Top?

U.S. West Texas Intermediate crude oil futures settled higher for the first time in three weeks. The market was primarily supported by the halting of shipments by Saudi Arabia through a key waterway. Additional support was provided by another bigger-than-expected drawdown in U.S. crude oil inventories.

Concerns about increasing output from Saudi Arabia and other major non-OPEC producers may have kept a lid on prices. Furthermore, there are concerns that lingering trade disputes will lead to lower demand in the second half of the year.

Last week, September West Texas Intermediate crude oil futures settled at $68.69, up $0.43 or +0.63%.

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $72.98 will signal a resumption of the uptrend. The trend will change to down on a move through $62.99.

The minor trend is also up. It will change to down on a move through $66.29. This will also shift momentum to the downside.

The market is currently trading inside a major, long-term retracement zone at $64.93 to $70.70. This zone is controlling the longer-term direction of the crude oil market.

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

The minor range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance.

The combination of the retracement zones creates a key resistance cluster at $70.42 to $70.70.

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Weekly Swing Chart Technical Forecast

Based on the close at $68.69, the early upside targets are $69.64, $70.42 and $70.70. The latter is the trigger point for an acceleration to the upside with $72.98 the next major target.

The first three downside targets are $67.99, $66.81 and $66.29. The latter is the trigger point for an acceleration into major 50% support levels at $64.93 and $63.92, followed by $62.99.

The market will resume its bullish tone over $70.70. A bearish tone will develop if sellers can form a secondary lower top.