Crude Oil Price Update – Short-Term Strength Over $69.79, Weakness Under $68.26
U.S. West Texas Intermediate crude oil futures closed lower on Friday after a disappointing U.S. jobs report indicated a spotty economic recovery that could mean slower fuel demand during a resurgent pandemic.
Despite the surprisingly weak economic report, losses were thwarted by concerns that U.S. supply would remain limited in the wake of Hurricane Ida, which cut production from the U.S. Gulf of Mexico.
On Friday, October WTI crude oil futures settled at $69.29, down $0.70 or -1.00%.
Non-Farm Payrolls missed expectations with an increase of 235,000 jobs amid a softening in demand for services and persistent worker shortages as COVID-19 infections soared, Reuters reported. Economists polled by Reuters had forecast Non-Farm Payrolls would increase by 278,000 jobs.
Meanwhile oil and gas production in the U.S. Gulf of Mexico remained largely halted in the aftermath of Hurricane Ida, with 1.7 million barrels, or 93%, of daily crude output suspended, according to offshore regulator the Bureau of Safety and Environmental Enforcement.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $70.61 will signal a resumption of the uptrend. A move through $61.74 will change the main trend to down. Friday’s inside move suggests investor indecision and impending volatility.
The minor trend is also up. A trade through $67.12 will change the minor trend to down. This will also shift momentum to the downside.
The short-term range is $74.77 to $61.74. On Friday, the market closed inside its retracement zone at $68.26 to $69.79.
The main support zone is $65.51 to $63.32.
Friday’s close suggests the direction of October WTI crude oil futures early Tuesday when the market reopens will be determined by trader reaction to $69.79.
A sustained move over $69.79 will indicate the presence of buyers. The first upside target is last week’s high at $70.61. This is a potential trigger point for an acceleration to the upside. The daily chart doesn’t show any resistance until $73.52.
A sustained move under $69.79 will signal the presence of sellers. The first downside target is a 50% level at $68.26. Buyers could come in on the first test of this level. If it fails, prices could break sharply into the minor bottom at $67.12.