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U.S. West Texas Intermediate crude oil prices settled higher on Wednesday, reversing an early setback after the Biden administration said it would call on U.S. producers to increase crude output, and that efforts to increase OPEC production were a longer-range plan.
On Wednesday, October WTI crude oil settled at $69.02, up $0.96 or +1.41%.
Prices were also boosted by a weekly inventories report from the Energy Information Administration (EIA) showing U.S. crude supplies fell during the week-ending August 6, shifting the spotlight away from production by OPEC.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $73.52 will change the main trend to up. A move through $65.00 will signal a resumption of the downtrend.
The minor trend is also down. A trade through $69.87 will change the minor trend to up. This will also shift momentum to the upside.
The main range is $56.24 to $74.77. Its retracement zone at $65.51 to $63.32 is support. This zone stopped the selling at $65.00 on August 9 and at $64.49 on July 20.
The minor range is $73.52 to $65.00. Its retracement zone at $69.26 to $70.27 is potential resistance.
The short-term range is $74.77 to $64.49. Its retracement zone at $69.63 to $70.84 is another potential resistance area.
Daily Swing Chart Technical Forecast
The direction of the October WTI crude oil futures contract early Thursday is likely to be determined by trader reaction to $69.26.
Bullish Scenario
A sustained move over $69.26 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into $70.27 and $70.84. Since the main trend is down, sellers are likely to come in on a test of this area.
Bearish Scenario
A sustained move under $69.26 will signal the presence of sellers. If this move generates enough downside momentum then look for a possible retracement into $67.13. If this fails then look for the selling to possibly extend into $65.51 to $65.00.
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This article was originally posted on FX Empire