Crude Oil Price Update – Downside Momentum Increasing with $63.44 to $62.41 Next Target

U.S. West Texas Intermediate crude oil futures are trading lower on Tuesday after giving up earlier gains. The move looks like simple profit-taking ahead of the release of today’s American Petroleum Institute (API) inventories report at 21:30 GMT and Wednesday’s inventories report from the Energy Information Administration (EIA).

At 15:54 GMT, May WTI crude oil is trading $64.43, down $0.50 or -0.77%.

U.S. crude oil and refined product stockpiles likely fell last week, with distillate inventories seen drawing down for fifth straight week, a preliminary Reuters poll showed on Monday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower following the formation of the closing price reversal top on Monday and its subsequent confirmation earlier today.

A trade through $67.79 will negate the closing price reversal top and signal a resumption of the uptrend. Taking out $59.08 will change the main trend to down.

The minor range is $59.08 to $67.79. Its retracement zone at $63.44 to $62.41 is the first downside target. Since the main trend is up, buyers could come in on the first test of this zone. If it fails then the odds of a near-term change in trend go up.

Daily Swing Chart Technical Forecast

If the downside momentum continues then look for a test of $63.44 to $62.41. Watch for a technical bounce on the first test.

If $63.44 fails to stop the price slide then look for the selling to possibly extend into $62.41. Once again look for buyers on the first test of this Fibonacci level.

If $62.41 fails then look for a possible acceleration to the downside with $59.08 the first major downside target.

For a look at all of today’s economic events, check out our economic calendar.