June WTI Crude Oil: $109.40 is Trigger Point for Acceleration to Upside

U.S. West Texas Intermediate crude oil futures are trading higher following a mixed government inventories report. Prices were also boosted as the European Union, the world’s largest trading bloc, spelled out plans to phase out imports of Russian oil, which offset worries about demand in top oil importer China.

At 18:51 GMT, June WTI crude oil is trading $108.59, up $5.98 or +5.84%. The United States Oil Fund ETF (USO) is at $80.62, up $3.93 or +5.13%.

US Energy Information Inventories Report

U.S. crude oil stockpiles rose unexpectedly last week, while distillate and gasoline inventories dropped again as refiners continue to boost fuel exports to a world in need of supply, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories rose by 1.3 million barrels in the week to April 29 to 415.7 million barrels, compared with analysts’ expectations in a Reuters poll for an 829,000-barrel drop.

Distillate stockpiles dropped by 2.2 million barrels to 228.6 million barrels. Moscow’s invasion of Ukraine, and subsequent moves by the United States and allies to curtail imports of Russian oil, has tightened supply worldwide. That has boosted interest in U.S. refined product exports.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $109.20 will signal a resumption of the uptrend. A move through $95.28 will change the main trend to down.

The minor trend is also up. A trade through $100.28 will change the minor trend to down and shift momentum to the downside.

The short-term range is $121.17 to $90.37. The market is currently testing its retracement zone at $105.77 to $109.40.

On the downside, support is a series of retracement levels at $102.19, $100.90 and $98.94.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market into the close on Wednesday is likely to be determined by trader reaction to $105.77.

Bullish Scenario

A sustained move over the 50% level at $105.77 will indicate the presence of buyers. Taking out the main top at $109.20 will reaffirm the uptrend. A move through the Fibonacci level at $109.40 could trigger an acceleration to the upside with $113.51 the next major target.

Bearish Scenario

A sustained move under $105.77 will signal the presence of sellers. This could trigger a break into the series of retracement levels at $102.19, $100.90 and $98.94.