Crude Oil Price Update – Weakens Under $64.84, Strengthens Over $65.33

U.S. West Texas Intermediate crude oil futures are trading lower early Tuesday as the prospect of the main U.S. East Coast gasoline pipeline remaining shut for the rest of this week led some U.S. Gulf Coast refiners to cut output, denting their appetite for crude.

At 05:15 GMT, June WTI crude oil is trading $64.33, down $0.59 or -0.91%.

Colonial Pipeline, which transports more than 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, shut down its network on Friday after being hit by a cyberattack. Colonial said on Monday it aims to resume full operations by the end of this week.

In other news, at 20:30 GMT, the American Petroleum Institute (API) will release its weekly inventories report. Analysts are expecting crude oil inventories to have dropped about 2.3 million barrels in the week to May 7. Gasoline stocks are expected to have fallen by about 400,000 barrels.

Prices could rebound late in the session if the gasoline draw comes in larger than expected.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $62.91 will change the main trend to down. A move through $66.76 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $63.90 will change the minor trend to down. This will confirm the shift in momentum.

The short-term range is $67.29 to $57.29. Its retracement zone at $63.47 to $62.29 is the next target zone and potential support. This zone is controlling the near-term direction of the market.

The first minor range is $62.91 to $66.76. Its 50% level at $64.84 is resistance.

The second minor range is $66.76 to $63.90. Its 50% level at $65.33 is as second resistance level.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the June WTI crude oil market on Tuesday is likely to be determined by trader reaction to $64.84.

Bearish Scenario

A sustained move under $64.84 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at $63.90, followed by the short-term Fibonacci level at $63.47 and the main bottom at $62.91.

Bullish Scenario

A sustained move over $64.84 will signal the presence of buyers. The first upside target is $65.33, followed by $65.75. The latter is a potential trigger point for an acceleration to the upside with $66.76 the next upside target.

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