Crude Oil Price Update – Strengthens Over $42.01, Weakens Under $41.33

U.S. West Texas Intermediate crude oil futures are trading lower shortly after the regular session opening. Earlier in the session, the market plunged to its lowest level since August 10 in reaction to another disappointing U.S. initial claims report. However, prices have now clawed back more than half of its early losses.

At 14:28 GMT, October WTI crude oil is trading $42.51, down $0.60 or -1.39%.

U.S. weekly jobless claims totaled 1.106 million last week, the Labor Department reported. Economists polled by Dow Jones estimated that 923,000 first-time applicants filed for unemployment benefits during the week ended August 15. In the week prior, the tally had dropped below 1 million for the first time since mid-March.

The disappointing number raises concerns over job-related driving demand. Furthermore, on Thursday, major producers warned of a risk to demand recovery if the coronavirus crisis is prolonged.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $43.68 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 39.00.

The minor trend is also up. A trade through $41.33 will change the minor trend to down. This will also shift momentum to the downside.

The major support is the long-term 50% level at $42.01.

The minor range is $39.00 to $43.68. Its 50% level at $41.34 is a second support level. This price forms a support cluster at $41.34 to $41.33.

Dally Swing Chart Technical Forecast

Based on the early price action and the current price at $42.51, the direction of the October WTI crude oil market into the close on Thursday is likely to be determined by trader reaction to a pair of 50% levels at $42.01 and $41.34.

Bullish Scenario

A sustained move over $42.01 will indicate the presence of buyers. Taking out $43.29 will indicate the buying is getting stronger, while a drive through $43.68 will signal a resumption of the uptrend.

Bearish Scenario

The first sign of weakness will be a drive through $42.01. Taking out the support cluster at $41.34 – $41.33 could trigger the start of an acceleration to the downside with $39.00 the next major downside target.

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