June WTI Oil: Rangebound Between Pair of Retracement Zones

U.S. West Texas Intermediate crude oil futures are down late in the session on Friday, putting it in a position to post a nearly 5% weekly loss. Buyers are trying to form an intraday support base, however, the fundamentals are mixed but mostly bearish.

Putting the pressure on the market is the prospect of weaker global growth due to the war in Ukraine and soaring inflation, higher interest rates, a strong U.S. Dollar and COVID-19 lockdowns in China that are being blamed for demand destruction.

At 17:55 GMT, June WTI crude oil futures are trading $102.16, down $1.63 or -1.57%. The United States Oil Fund ETF (USO) is at $76.30, down $1.82 or -2.33%.

Looking ahead to next week, bullish traders are hoping the European Commission announces the widely anticipated ban on Russian crude oil and other energy products.

An EU source told Reuters this week the European Commission was working to speed up availability of alternative energy supplies. Additionally, a senior White House adviser said he was confident Europe is determined to close off or further restrict remaining Russian oil and gas 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 $92.60 will change the main trend to down.

The minor trend is also up. A trade through $99.88 will change the minor trend to down. This will also shift momentum to the downside. A move through the minor top at $105.42 will be a sign of strength.

The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the buying at $109.20 on April 18.

The minor range is $92.60 to $109.20. Its retracement zone at $100.90 to $98.94 is support. This zone stopped the selling $99.88 on April 20.

Daily Swing Chart Technical Analysis

Trader reaction to $100.90 is likely to determine the direction of the June WTI crude oil futures market into the close.

Bullish Scenario

A sustained move over $100.90 will indicate the presence of buyers. If this move creates enough upside momentum then look for a late session rally into $105.42 – $105.77.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. Taking out $99.88 will indicate the selling pressure is getting stronger. This could lead to a test of $98.84. This Fibonacci level is a potential trigger point for an acceleration to the downside.