Crude Oil Price Update – Trader Reaction to $69.72 Minor Pivot Will Determine Near-Term Direction

U.S. West Texas Intermediate crude oil futures are edging lower late Friday, while trading inside Wednesday’s wide range for a second session, indicating investor indecision and impending volatility. Nonetheless, the market remained in a position to post a weekly gain.

The catalyst behind the selling pressure is renewed supply as energy companies in the U.S. Gulf of Mexico started production after back-to-back hurricanes in the region shut output.

At 19:43 GMT, December WTI crude oil futures are trading $71.42, down $0.49 or -0.68%.

Gulf Coast crude oil exports are flowing again after hurricanes Nicholas and Ida took out 26 million barrels of offshore production. Restarts continued with about 28% of U.S. Gulf of Mexico crude output offline, Reuters reported on Thursday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the July 6 main top at $72.61 will reaffirm the uptrend. A move through $67.04 will change the main trend to down.

The minor range is $67.04 to $72.39. Its 50% level at $69.72 is the next downside target.

The short-term range is $61.11 to $72.39. If the main trend changes to down then its retracement zone at $66.75 to $65.42 will become the primary downside target area. Look for a technical bounce on the first test of this zone.

Short-Term Outlook

The direction of the December WTI crude oil market into the close on Friday will be determined by trader reaction to $71.21.

Bullish Scenario

A sustained move over $71.21 will indicate the presence of buyers. If this move creates enough upside momentum into the close then look for a possible test of $72.39 – $72.61.

Bearish Scenario

A sustained move under $71.21 into the close will signal the presence of sellers. This will likely lead to a test of the nearest pivot at $69.72 on Monday.

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