Crude Oil Price Update – Strong Intraday Rebound Puts WTI Crude in Position to Challenge $110.07 Main Top

U.S. West Texas Intermediate crude oil futures are trading lower on Monday, but clawing back most of their earlier losses after the market found some support on supply concerns.

Oil prices retreated after a strong close on Friday as widespread lockdowns in China and weak Chinese economic data fueled fears of a global recession. However, the market was underpinned as the European Union moved closer to an import ban on Russian crude.

At 12:54 GMT, July WTI crude oil is trading $108.07, down $0.56 or -0.52%. This is up from an intraday low of $106.27. On Friday, the United States Oil Fund ETF (USO) settled at $81.29, up $2.06 or +2.60%. It is expected to open today’s session slightly lower.

Besides Chinese demand and European supply issues, traders are also monitoring U.S. gasoline stocks. U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fueled supply concerns. Supply is expected to continue to fall and prices rise as traders prepare for the summer driving season.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $109.82 will signal a resumption of the uptrend. Taking out $110.07 will reaffirm the uptrend. A move through $96.93 will change the main trend to down.

The short-term range is $116.43 to $88.53. The market is currently trading on the strong side of its retracement zone at $105.77 to $102.48, making it support.

The minor range is $92.15 to $109.82. Its retracement zone at $100.99 to $98.90 is additional support.

The combination of the two retracement zones makes a pair of 50% levels at $102.48 – $100.99 the major support.

Daily Swing Chart Technical Forecast

Trader reaction to $105.77 will likely determine the direction of the July WTI crude oil market on Monday.

Bullish Scenario

A sustained move over $105.77 will indicate the presence of buyers. Taking out the intraday high at $109.82 will indicate the buying is getting stronger and could create the upside momentum needed to challenge the main top at $110.07.

A trade through $110.07 will reaffirm the uptrend and could trigger an acceleration into the March 7 main top at $116.43.

Bearish Scenario

A sustained move under $105.77 will signal the presence of sellers. This could trigger a sharp break into a series of potential support levels at $102.48, $100.99 and $98.90.