June WTI Oil: Sellers Next Target $100.90 – $98.94 RT Zone

U.S. West Texas Intermediate crude oil futures are edging lower shortly after the mid-session on Friday, headed for a weekly loss. Although the fundamentals remain mixed, concerns over demand are outweighing worries over supply.

Short-term bullish traders have been liquidating long positions all week, encouraged by the prospect of weaker global growth, higher interest rates and COVID lockdowns in China.

At 13:24 GMT, June WTI crude oil futures are trading $102.01, down $1.78 or -1.72%. The United States Oil Fund ETF (USO) is at $76.68, down $1.44 or -1.84%.

Long-term bullish traders, however, have been playing the waiting game, encouraged by the possibility of a ban on Russian oil by the European Union that would further tighten supply.

IMF Economic Growth Cuts Set the Tone This Week

The heavy selling started this week after the International Monetary Fund (IMF), cut its global economic growth forecast and said it could further downgrade it if Western countries expand their sanctions against Russia over its war against Ukraine, and energy prices rise further.

Bloomberg Analysis Also Sees Slower Growth

The German government will cut its growth forecast for 2022 to 2.2% from 3.6%, a government source said, while Chinese demand for gasoline, diesel and aviation fuel in April is expected to slide 20% from a year earlier, Bloomberg reported, as many of China’s biggest cities, including Shanghai, are in COVID-19 lockdowns.

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 and shift momentum to the downside. A move through the minor top at $105.42 will indicate the buying is getting stronger.

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 area stopped the selling at $99.88 on April 20.

Daily Swing Chart Technical Forecast

The direction of June WTI crude oil futures into the close on Friday is likely to be determined by trader reaction to $100.90.

Bullish Scenario

A sustained move over $100.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the minor top at $105.42, followed by the short-term 50% level at $105.77.

Bearish Scenario

A sustained move under $100.90 will signal the presence of sellers. Taking out the minor bottom at $99.88 will indicate the selling is getting stronger with the minor Fibonacci level at $98.94 the next target.

The Fib level at $98.94 is a potential trigger point for an acceleration to the downside with $92.60 – $91.33 the next likely target.