Crude Oil Price Update – Trader Reaction to $66.05 Sets the Tone into Close

U.S. West Texas Intermediate crude oil futures are edging higher at the mid-session after clawing back all of its earlier losses. The market is getting a boost on uncertainty over a U.S./Iran nuclear deal. Last week, the market plunged as speculators bet on such a deal bringing more oil to an oversupplied market.

At 16:34 GMT, July WTI crude oil is trading $66.31, up $0.26 or +0.39%.

At 20:30 GMT, traders will get the opportunity to react to the latest inventory data from the American Petroleum Institute (API). The report is expected to show a 1.0 million barrel drawdown.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since Friday’s closing price reversal bottom.

A trade through $67.20 will change the main trend to up. A move through $61.56 will signal a resumption of the downtrend.

The short-term range is $67.02 to $61.56. Its retracement zone at $64.94 to $64.29 is the nearest support.

Another short-term retracement zone support area comes in at $63.79 to $63.02.

The main range is $57.18 to $67.02. Its retracement zone at $62.10 to $60.94 is also support. It stopped the selling at $61.56 on May 21. This zone is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil market into the close on Tuesday is likely to be determined by trader reaction to $66.05.

Bullish Scenario

A sustained move over $66.05 will indicate the presence of buyers. If this move continues to generate enough upside momentum then we could see at test of the contract high at $67.02.

Bearish Scenario

A sustained move under $66.05 will signal the presence of sellers. This will be an early sign of a shift in momentum. The first downside target is the short-term Fibonacci level at $64.94. If this level fails then look for the selling to possibly extend into the short-term 50% level at $64.29.