Crude Oil Price Update – Strengthens Over $36.61 into Close; Weakens Under $36.07The direction of the July WTI crude oil futures contract into the close is likely to be determined by trader reaction to $36.61 and $36.07.
U.S. West Texas Intermediate crude oil futures are trading flat at the mid-session on Thursday despite doubts over the ability of top crude producers to agree to extend output cuts and worries over a build in U.S. fuel inventories.
Apparently, Saudi Arabia and Russia want to extend cuts of 9.7 million barrels per day (bpd) that major producers agreed to in April. However, there are concerns over poor compliance by some producers. Meanwhile, Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend voluntary additional output cuts of 1.18 million bpd after June, indicating that crude supply could rise next month regardless of any OPEC+ decision.
At 17:29 GMT, July WTI crude oil is trading $37.32, up $0.03 or +0.08%.
A surge in gasoline and distillate stocks is also a major concern. The U.S. Energy Information Administration reported on Wednesday that gasoline stocks rose by 2.8 million barrels during the week-ending May 29 and distillate inventories jumped 9.9 million barrels, nearly quadruple expectations.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $38.18 will signal a resumption of the uptrend. A move through $31.14 will change the main trend to down.
The main range is $54.86 to $17.27. Its retracement zone at $36.07 to $40.50 is controlling the longer-term direction of the market. WTI crude oil is currently trading inside this range.
Based on the early price action, the direction of the July WTI crude oil futures contract the rest of the session on Thursday is likely to be determined by trader reaction to a downtrending Gann angle at $36.61 and a 50% level at $36.07.
A sustained move over $36.61 should provide support into the close on Thursday with $38.18 a potential upside target.
A sustained move under $36.07 will indicate the selling pressure is getting stronger. This could trigger the start of a break into the next uptrending Gann angle currently at $33.64.
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