Crude Oil Price Update – Edging Lower on Disappointing Gasoline Demand

U.S. West Texas Intermediate crude oil futures are edging lower late in the session, while posting an inside move, which tends to indicate investor indecision and impending volatility.

Despite an impressive three-day rally, gains were likely capped by a government report showing lower gasoline demand during the peak summer driving season. Additionally, worries over interest rate hikes by central banks to battle inflation also fed fears of a potential U.S. recession, and the prospect of lower energy demand.

At 18:55 GMT, September WTI crude oil futures are trading $99.89, down $0.85 or -0.84%. Additionally, the United States Oil Fund, is at $77.87, down $0.18 or -0.23%.

US Energy Information Administration Weekly Inventories Report

On Wednesday, the EIA reported U.S. crude inventories fell by 446,000 barrels the week-ended July 15, compared with analysts’ expectations for a 1.4 million-barrel rise. Meanwhile, U.S. gasoline inventories rose 3.5 million barrels last week, far exceeding analysts’ forecasts in a Reuters poll for a 71,000-barrel rise.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $102.00 will change the main trend to up. A move through $88.23 will signal a resumption of the downtrend.

The market is currently straddling a short-term pivot at $99.69.

On the upside, the next target and potential resistance is $103.16 to $106.68. On the downside, minor support is $96.74 to $95.12. The major support zone is $89.54 to $82.80.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term pivot at $99.69 is likely to determine the direction of the September WTI crude oil market into the close on Wednesday.

Bullish Scenario

A sustained move over $99.69 will indicate the presence of buyers. Taking out Tuesday high at $100.99 could trigger an acceleration into the main top at $102.00, followed by the retracement zone at $103.16 to $106.68.

Bearish Scenario

A sustained move under $99.69 will signal the presence of sellers. This could trigger a sharp break into the retracement zone at $96.74 to $95.12. The latter is a potential trigger point for an acceleration to the downside.