June WTI Crude Oil Posting Two-Sided Trade on Shifting Fundamentals

James Hyerczyk
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U.S. West Texas Intermediate crude oil futures are trading lower at the mid-session on Monday as investors shifted their worries back to the demand side of the equation as worries over growth in China trumping fears supply might be hit by a potential European Union ban on Russian crude.

At 16:02 GMT, June WTI crude oil futures are trading $104.43, down $0.26 or -0.25%. The United States Oil Fund ETF (USO) is at $77.45, up $0.29 or +0.45%.

Weak production data from China over the weekend is the catalyst driving the selling pressure today. China released data on Saturday showing factory activity in the world’s second-largest economy contracted for a second month to its lowest since February 2020 because of COVID lockdowns.

In other news, bearish news on the supply side also weighed on prices. Libya’s National Oil Corp (NOC) said on Sunday it would temporarily resume operations at the Zueitina oil after it declared force majeure in late April on some shipments as political protesters forced a number of oil facilities to suspend operations.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower following the confirmation of Friday’s closing price reversal top.

A trade through $107.99 will negate the chart pattern, while a move through $109.20 will reaffirm the uptrend. The main trend will change to down on a move through $95.28.

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 $107.99 on Friday.

On the downside, support is a pivot at $102.24, followed by a retracement zone at $100.90 to $98.94. The zone stopped the selling earlier today at $100.28.

Daily Swing Chart Technical Forecast

A trade through $104.14 is likely to determine the direction of the June WTI crude oil market into the close on Monday.

Bullish Scenario

A sustained move over $104.14 will indicate the presence of buyers. The first target is the short-term 50% level at $105.77, followed by the minor top at $107.99, the main top at $109.20 and the short-term Fibonacci level at $109.40. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $104.14 will signal the presence of sellers. This could trigger a labored break into retracement levels at $102.24, $100.90 and $98.94. The latter is a potential trigger point for an acceleration into the main bottom at $95.28.

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

This article was originally posted on FX Empire

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