WTI Oil Struggling Inside $101.32 – $106.12 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading higher on Tuesday but off their overnight high. The catalysts behind the early strength are reports that the United States and Europe were planning new sanctions to punish Russia over alleged war crimes in Ukraine. Meanwhile, traders continue to express concerns over tighter global supply after Iran’s nuclear talks with Western powers stalled.

At 11:17 GMT, May WTI crude oil futures are trading $104.18, up $0.90 or +0.87%. This is down from an intraday high of $105.59. On Monday, the United States Oil Fund ETF (USO) settled at $76.87, up $2.70 or +3.64%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $97.78 will change the main trend to down. A move through $116.64 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $108.75 will change the minor trend to up.

May WTI crude oil is currently trading inside the intermediate retracement zone at $106.12 to $101.32. This zone appears to be controlling the near-term direction of the market.

On the upside, the nearest resistance is a short-term retracement zone at $109.31 to $113.35. On the downside, the nearest support is the main retracement zone at $94.14 to $86.52.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the 50% level at $106.12.

Bearish Scenario

A sustained move under $106.12 will indicate the presence of sellers. The first downside target is the Fibonacci level at $101.32. This is the last support before the $97.78 main bottom

Taking out $97.78 will change the main trend to down with the next major target $94.14 to $86.52. Inside this zone is another main bottom at $92.20.

Bullish Scenario

A sustained move over $106.12 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into $109.31 to $113.35. The latter is the last potential resistance before the $116.64 main top.