Crude Oil Price Update – Trading on Weakside of Retracement Zone at $63.32-$65.51 with $60.68 Next Target

U.S. West Texas Intermediate crude oil futures are trading lower early Thursday, putting the market in a position to post its sixth straight lower close. The move, which represents the market’s longest losing streak since February 2020, has driven crude to its lowest level since May 24.

At 08:35 GMT, October WTI crude oil is trading $63.10, down $2.11 or -3.24%.

The catalyst behind the selling pressure is a spike in COVID-19 cases worldwide that is fueling fears of lower fuel demand. Additionally, a surprise build in U.S. gasoline inventories and a stronger U.S. Dollar added to the weakness. Rising U.S. production is also an emerging concern.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at $62.77 will reaffirm the downtrend. A move through $69.39 will change the main trend to up.

The main range is $56.24 to $74.77. The market is currently trading on the weak side of its retracement zone at $63.32 to $65.51. This zone is new resistance. It is also controlling the near-term direction of the market.

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 the main Fibonacci level at $63.32.

Bearish Scenario

A sustained move under $63.32 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the May 21 main bottom at $60.68, followed closely by the April 22 main bottom at $59.56.

Bullish Scenario

A sustained move over $63.32 will signal the presence of buyers. If this move is able to generate enough upside momentum, we could see an intraday recovery into the main 50% level at $65.51.

If the market stops going down then look for traders to attempt to stabilize it inside $63.32 to $65.51.