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Crude Oil Price Update – Strong Upside Breakout Puts $116.43 on Radar, Followed by $121.17

By:
James Hyerczyk
Updated: May 26, 2022, 16:16 UTC

After several days of accumulation, the uptrend was reaffirmed when buyers took out $113.20.

WTI Crude Oil

In this article:

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher at the mid-session on Thursday. The market is being supported by optimism that the European Union will be able to overcome its differences and soon agree on a proposed ban on Russian energy products.

At 15:54 GMT, July WTI crude oil futures are trading $114.37, up $4.04 or +3.66%. The United States Oil Fund ETF (USO) is at $84.77, up $2.29 or +2.78%.

The market is also being supported by increasing U.S. refining activity, which is helping to draw down crude oil stockpiles. Additionally, gasoline stockpiles are also extremely low at the start of the U.S. summer driving season, which could put additional upward pressure on crude oil prices.

Finally, increased demand for riskier assets following a surge in U.S. stock market futures is also providing unexpected support.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trade through $113.20 signaled a resumption of the uptrend. A move through $103.24 will change the main trend to down.

The minor trend is also up. It resumed when buyers took out $111.96 earlier in the session. A trade through $108.61 will change the minor 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 the area important support. The recent price action suggests that it is controlling the near-term direction of this futures contract.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil futures contract into the close on Thursday will be determined by trader reaction to $110.33.

Bullish Scenario

A sustained move over $110.33 will indicate the presence of buyers. Continuing to hold above $113.20 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge the March 7 main top at $116.43.

Taking out $116.43 will reaffirm the uptrend with the nearby contract’s main top at $121.17 the next major target.

Bearish Scenario

A break under $113.20 will be the first sign of weakness, while crossing to the weak side of $110.33 will put July WTI crude oil in a bearish position.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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