September West Texas Intermediate crude oil futures are trading mixed shortly before the regular session opening. Earlier in the session, the market rallied, supported by a slowdown in the growth of crude oil rigs in the U.S. and strong refinery demand from China.
According to energy services firm Baker Hughes, U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765. However, new rigs over the past four weeks averaged five, the lowest since November 2016.
In other news, Chinese refineries increased crude throughout in June to the second highest on record, according to the National Bureau of Statistics.
The main trend is up according to the daily swing chart. Momentum has also been trending higher since the formation of the main bottom at $43.83 on July 10.
A trade through $47.45 will reaffirm the uptrend.
The main retracement zone at $47.33 to $48.52 is also a potential upside target.
The short-term range is $42.27 to $47.45. Its retracement zone at $44.86 to $44.25 is new support.
Based on the current price at $46.79, the nearest support is a pair of uptrending angles at $46.52 and $46.33. Since the main trend is up, we could see a technical bounce on the first test of these angles. We could see an acceleration to the downside if $46.33 fails as support. The daily chart shows there is room to the downside with the next target angle coming in at $45.08.
If the earlier intraday rally resumes then the move may extend into the major 50% level at $47.33, followed closely by the main top at $47.45. This price is the trigger point for an acceleration into the downtrending angle at $48.00, followed by the major Fibonacci level at $48.52.
The trigger point for a strong rally is $47.45 and for a sell-off at $46.33.