Crude Oil Price Update – Weakens Under $66.68, Strengthens Over $67.20

U.S. West Texas Intermediate crude oil futures are trading steady to better early Wednesday on light volume as traders hope to bring an end to its four day losing streak.

Helping to underpin prices are a U.S. industry report that showed crude oil and gasoline inventories fell last week. Gains are likely being capped by worries over future demand as the use of rail, air and other forms of transportation remained constrained amid surging COVID-19 cases worldwide.

At 06:54 GMT, October WTI crude oil is trading $66.89, up $0.55 or +0.83% and October Brent crude oil is at $69.61, up $0.58 or +0.84%.

At 14:30 GMT, traders will get the opportunity to react to the latest inventories data from the Energy Information Administration (EIA). Crude and gasoline inventories in the United States are expected to have fallen last week, while distillate stocks are likely to have risen for a third straight week, an extended Reuters poll showed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $65.00 will signal a resumption of the downtrend. A move through $69.39 will change the main trend to up.

The minor range is $65.00 to $69.39. The market is currently straddling its retracement zone at $67.20 to $66.68.

On the downside, the major support range is $65.51 to $63.32. This zone stopped the selling at $64.49 on July 20, at $65.00 on August 9 and on Tuesday at $65.51.

The short-term range is $73.52 to $65.00. Its retracement zone at $69.24 to $70.25 is resistance. This zone stopped the buying on August 12 at $69.39.

Daily Swing Chart Technical Forecast

The direction of the October WTI crude oil market on Wednesday is likely to be determined by trader reaction to $66.68.

Bearish Scenario

A sustained move under $66.68 will indicate the presence of sellers. If this move creates enough downside momentum then look for a break into $65.51. If this fails to hold then look for the selling to possibly extend into the main bottom at $65.00. This is followed by another main bottom at $64.40 and a major Fibonacci level at $63.32.

Bullish Scenario

A sustained move over $66.68 will signal the presence of buyers. The first upside target is $67.20. This is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with the next potential upside target coming in at $69.24 to $69.39.