Crude Oil Price Update – Trader Reaction to $67.63 to $69.02 Retracement Zone Sets the Tone

U.S. West Texas Intermediate crude oil futures finished marginally higher on Wednesday in a volatile session with prices whipsawed by mixed U.S. government inventories data and potentially bearish supply news from OPEC+

On Wednesday, October WTI crude oil futures settled at $68.59, up $0.09 or +0.13%.

According to the U.S. Energy Information Administration (EIA), U.S. crude inventories fell by 7.2 million barrels last week to 425.4 million barrels. Analysts had expected a 3.1 million-barrel drop. However, U.S. gasoline stocks rose by 1.3 million barrels last week.

Meanwhile, OPEC and its allies, agreed to stick to a policy from July of phasing out record output cuts by adding 400,000 barrels per day (bpd) a month to the market.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up on Monday when buyers took out the previous main top at $69.39. The lack of follow-through to the upside suggests the move was fueled by buy stops rather than new buyers. This could mean the market will need to pullback in order to attract new buyers.

A trade through $69.64 will signal a resumption of the uptrend. The main trend will change to down on a trade through $61.74.

The minor trend is also up. A new main top was formed at $69.64 on Wednesday.

The short-term range is $73.52 to $61.74. The market is currently straddling its retracement zone at $67.63 to $69.02. This zone is controlling the near-term direction of the market.

On the downside, the main support is the retracement zone at $65.51 to $63.32.

Daily Swing Chart Technical Forecast

The direction of the October WTI crude oil market on Thursday is likely to be determined by trader reaction to $69.02.

Bullish Scenario

A sustained move over $69.02 will indicate the presence of buyers. Taking out $69.64 will signal a resumption of the uptrend. The daily chart indicates there is plenty of room to the upside with $73.52 the next major target. If the buying volume is strong enough then a breakout over $69.64 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $69.02 will signal the presence of sellers. The first downside target is the 50% level at $67.63. This is a potential trigger point for an acceleration to the downside with the next key target the main 50% level at $65.51.