Crude Oil Price Update – Trader Reaction to $73.26 Sets the Early Tone on Friday

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Thursday, but well off their highs. At its peak, the market was up over 2% on indications that OPEC+ producers could increase output more slowly than previously estimated in coming months, while rising global fuel demand continues to tighten global supply.

At 20:03 GMT, September WTI crude oil futures are trading $74.07, up $1.30 or +1.79%.

After an initial surge to levels not seen since October 2018, futures pared gains after OPEC and its allies, known as OPEC+, delayed its ministerial meeting until Friday to hold more talks on oil output policy, sources said, after the United Arab Emirates blocked a plan for immediate reduction in supply cuts.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out the previous main top at $73.70. Taking out the intraday high at $75.23 will indicate the buying is getting stronger. A trade through $71.28 will change the main trend to down.

The new minor range is $71.28 to $75.23. Its 50% level at $73.26 is the nearest support.

The second minor range is $67.84 to $75.23. Its 50% level at $71.54 is another support level.

If the main trend changes to down then the third 50% level at $69.92 will become the next downside target.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market into the close on Thursday is likely to be determined by trader reaction to the minor pivot at $73.26.

Bullish Scenario

A sustained move over $73.26 will indicate the presence of buyers. If this is able to generate some late session momentum then look for the rally to possibly extend into the intraday high at $75.23.

Bearish Scenario

A sustained move under $73.26 will signal the presence of sellers. This could create the downside momentum needed to challenge the 50% level at $71.54 and the main bottom at $71.28. Taking out the main bottom will change the main trend to down. This could trigger a plunge into the third pivot at $69.92.

Side Notes

A close under $72.77 will form a potentially bearish closing price reversal top. If confirmed on Friday, this could trigger the start of a 2 to 3 day correction.