Crude Oil Price Update – Strengthens Over $94.61, Weakens Under $93.10

U.S. West Texas Intermediate crude oil futures settled lower on Friday after the European Union said it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states last week.

On Friday, September WTI crude oil futures settled at $94.70, down $1.65 or -1.71%. The United States Oil Fund ETF (USO) finished at $74.52, down $0.97 or -1.28%.

WTI also closed lower for the third straight week, pressured late in the week after data released Wednesday by the government showed that U.S. gasoline demand had dropped nearly 8% from a year earlier in the midst of the peak summer driving season, hit by record prices at the pump.

According to Reuters, Russian state-owned companies Rosneft and Gazprom will be able to ship oil to third countries under an adjustment of European Union sanctions agreed by member states this week aimed at limiting the risks to global energy security.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $100.99 will change the main trend to up. A move through $88.23 will reaffirm the downtrend.

The minor range is $88.23 to $100.99. Its retracement zone at $94.61 to $93.10 is the nearest downside target.

The major support is the retracement zone at $89.54 to $82.80. This zone stopped the selling at $88.23 on July 14.

The short-term range is $111.14 to $88.23. Its 50% level at $99.69 is the nearest resistance.

The intermediate range is $118.08 to $88.23. Its retracement zone at $103.16 to $106.68 is controlling the near-term direction of the market.

Short-Term Outlook

Trader reaction to the minor 50% level at $94.61 is likely to determine the direction of September WTI crude oil market early Monday.

Bullish Scenario

A sustained move over $94.61 will indicate the presence of buyers. They are going to try to form a potentially bullish secondary higher bottom. If successful, we could see a short-covering rally into the pivot at $99.69, followed closely by the main top at $100.99.

Bearish Scenario

A sustained move under $94.61 will signal the presence of sellers. The first downside target is the minor Fibonacci level at $93.10. If this fails, we could see an acceleration to the downside with the next target the main 50% level at $89.54, followed by the main bottom at $88.23.

The main bottom at $88.23 is a potential trigger point for an acceleration into the main Fibonacci level at $82.80.