Crude Oil Price Update – Showing Signs of Weakness with Trader Reaction to $62.67 Setting the Tone

U.S. crude oil futures are trading nearly flat on Thursday, but remain close to a two-year high reached the previous session. The early inside move suggests investor indecision and impending volatility.

The longer-term fundamentals remain bullish with investors betting on the reopening of the global economy to continue to drive expectations for robust future demand.

Short-term support continues to be driven by tight supply after the U.S. government’s inventories report on Wednesday showed drawdowns in both crude oil and gasoline. Finally, the slow pace of negotiations between the U.S. and Iran is also underpinning prices.

At 10:15 GMT, September WTI crude oil is trading $72.47, up $0.11 or +0.15%.

There are also short-term headwinds that could encourage investors to lighten up on the long side. OPEC+, which meets on July 1, have been discussing a further unwinding of last year’s record output cuts from August but no decision has been made, two OPEC+ sources said on Tuesday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $73.33 will reaffirm the uptrend. A trade through $61.06 will change the main trend to down.

The minor trend is also up. A trade through $68.86 will change the minor trend to down. This will also shift momentum to the downside.

The first minor range is $68.86 to $73.33. Its 50% level at $71.10 is the first downside target.

The second minor range is $67.84 to $73.33. Its 50% level at $70.59 is another potential downside target and potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market on Thursday is likely to be determined by trader reaction to $72.67.

Bullish Scenario

A sustained move over $72.67 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of $73.33. Taking out this level could trigger another surge to the upside.

Bearish Scenario

A sustained move under $72.67 will signal the presence of sellers. Taking out $72.01 will indicate the selling pressure is getting stronger. This could extend the down side move into the pair of pivot at $71.10 and $70.59.