Crude Oil Price Update – Trader Reaction to $66.51 Set the Tone into Close

U.S. West Texas Intermediate crude oil futures are edging higher at the mid-session on Wednesday following the release of the U.S. Energy Information Administration (EIA) weekly inventories report. U.S. crude stocks, gasoline and distillate inventories fell the week-ending May 21, but came in mostly in line with expectations.

At 15:36 GMT, July WTI crude oil is trading $66.23, up $0.16 or +0.24%.

The good news is that the fuel inventories fell more than expected ahead of the highly traveled Memorial Day holiday on Monday. Traders are hoping for robust gasoline and diesel fuel demand to spur higher crude oil prices as the U.S. economy reopens.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending to the upside. A trade through $67.02 will signal a resumption of the uptrend. A move through $61.56 will signal a resumption of the downtrend.

The minor trend is also down. A new minor top was formed at $66.51. A trade through this level will change the minor trend to up while reaffirming the shift in momentum to the upside.

The short-term range is $60.55 to $67.02. Its 50% to 61.8% level at $63.79 to $63.02 is the nearest support.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil contract into the close on Wednesday is likely to be determined by trader reaction to the minor top at $66.51.

Taking out $66.51 will not only change the minor trend to up, but it could trigger an acceleration into the main top at $67.02.

The inability to take out $66.51 late in the session will indicate that traders are reluctant to buy strength at current price levels and that the market may be due for a short-term pullback into a value area like $63.79 to $63.02 before moving higher.