U.S. West Texas Intermediate crude oil futures are inching higher at the mid-session after an early morning sell-off was fueled by renewed demand concerns. Nonetheless, the market continued to hover near a five-month high reached on Wednesday as it drew support from a weaker U.S. Dollar and falling U.S. crude oil inventories.
At 17:16 GMT, September WTI crude oil is trading $42.33, up $0.14 or +0.33%. Earlier in the session, the market touched a low of $41.61.
Oil investors remain wary of rising U.S. refined product inventories at a time when U.S. central bankers said the resurgence in coronavirus cases was slowing the economic recovery in the world’s biggest oil consumer.
EIA data showed distillate stockpiles, which include diesel and heating oil, climbed to a 38-year high and gasoline inventories unexpectedly rose for a second week.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $43.52 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at $38.72.
The major support is a long-term 50% level at $41.72.
The new minor range is $38.72 to $43.52. Its retracement zone at $41.12 to $40.55 is another potential downside target.
Daily Swing Chart Technical Forecast
The current price action indicates that the direction of the September WTI crude oil futures contract into the close will be determined by trader reaction to the major 50% level at $41.72.
A sustained move over $41.72 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of $43.52. This is a trigger point for an acceleration to the upside since the daily chart indicates there is plenty of room to the upside with $46.37 the next major target.
A sustained move under $41.72 will signal the presence of sellers. This could lead to a labored sell-off with potential support targets coming in at $41.12 and $40.55. Since the main trend is up, buyers are likely to come in on breaks into these levels.
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This article was originally posted on FX Empire
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