Crude Oil Price Update – Strengthens Over $70.42, Weakens Under $69.64

U.S. West Texas Intermediate crude oil futures are trading lower shortly before the regular session opening and the release of the second quarter U.S. Gross Domestic Product report at 1230 GMT.

The market is in a position to close nearly 2 percent higher this week. Support is being provided by the bullish U.S. Energy Information Administration’s weekly inventories report, Saudi Arabia’s halt on transporting crude through a key shipping lane, and the easing of trade tensions between the United States and European Union.

Traders will likely react to today’s U.S. second-quarter Gross Domestic Production report at 1230 GMT. It is expected to show the economy grew by 4.0 percent, up from 2.0 percent. Anything north of 4.1 percent could be bullish for prices because strong economic growth will mean greater demand for crude oil.

At 1146 GMT, September WTI crude oil is trading $69.48, down $0.13 or 0.16%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out $69.31. A trade through $67.56 will change the main trend to down.

The main range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is currently being tested. This zone is controlling the near-term direction of the market.

On the downside, the major support is a longer-term retracement zone at $67.99 to $66.81.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September WTI crude oil market is likely to be determined by trader reaction to the 50% level at $69.64.

A sustained move under $69.64 will indicate the presence of sellers. If this move generates enough downside momentum, we could see a steep break into $67.99, followed by $67.56.

A sustained move over $69.64 will signal the presence of buyers. This could trigger a rally into $70.42, followed closely by a minor top at $70.60. This price is a potential trigger point for an acceleration to the upside.

Basically, look for a downside bias to develop on a sustained move under $69.64 and for the upside bias to continue on a sustained move over $70.42.