Crude Oil Price Update – Strengthens Over $100.96, Weakens Under $98.88

U.S. West Texas Intermediate crude oil futures are edging higher on Wednesday after recovering from an early session loss. Today’s renewed strength follows a more than 9% drop so far this week.

The volatile turnaround in the market is being fueled by supply worries as the European Union continued to work on gaining support for the ban on Russian oil. The market was also being supported as major producers warned they may struggle to fill the gap when demand improves.

At 04:12 GMT, July WTI crude oil is trading $100.16, up $1.71 or 1.74%. On Tuesday, the United States Oil Fund settled at $74.57, down $2.00 or -2.61%.

Nonetheless, gains are expected to be capped by the strong dollar, high interest rates and worries of a slowdown in the global economy from prolonged COVID curbs in China.

Furthermore, the impact of the widely expected European commission embargo could be limited if the ban is watered down to ease the concerns of eastern European members. However, at this time, most traders expect a bullish reaction once the news is released.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $109.77 will signal a resumption of the uptrend. A move through $94.47 will change the main trend to down.

The minor trend is down. This is controlling the momentum. It changed to down on Tuesday when sellers took out the minor bottom at $98.87.

The minor range is $92.15 to $109.77. The market is currently straddling its retracement zone at $100.96 to $98.88.

The short-term range is $116.43 to $88.53. Its retracement zone at $102.48 to $105.77 is resistance.

The main support is a retracement zone at $88.88 to $82.37.

Daily Swing Chart Technical Forecast

Trader reaction to $98.88 is likely to determine the direction of the July WTI crude oil market on Wednesday.

Bullish Scenario

A sustained move over $98.88 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible surge into a pair of 50% levels at $100.96 and $102.48. The latter is a potential trigger point for an acceleration into the short-term Fibonacci level at $105.77.

Bearish Scenario

A sustained move under $98.88 will signal the presence of sellers. If the selling volume is strong enough, this move could trigger an acceleration to the downside with the $94.47 main bottom the next target. Taking out this level will change the main trend to down.