Crude Oil Price Update – Strengthens Over $95.05, Weakens Under $93.44

U.S. West Texas Intermediate crude oil futures are edging higher on Tuesday after posting a steep drop the previous session. Nonetheless, prices are still being capped by worries over energy demand after the latest manufacturing surveys in Asia, Europe and the United States weakened in June.

Long investors are also trimming positions ahead of this week’s OPEC+ meeting, in which the group will determine production levels for September.

Geopolitical tensions in Asia over U.S. House Speaker Nancy Pelosi’s visit to Taiwan are also driving down risk sentiment and encouraging buyers to curtail activity.

At 11:33 GMT, September WTI crude oil futures are trading $94.70, up $0.81 or +0.86%. On Monday, the United States Oil Fund ETF (USO) settled at $75.12, down $2.93 or -3.75%.

All Eyes on OPEC with US-China Tensions the Wildcard

The key focus this week is the meeting on Wednesday between OPEC+ to determine whether to increase output in September. Two of eight OPEC+ sources told Reuters that a modest increase for September would be discussed, while the rest said producers are likely to hold output steady.

Traders are also monitoring the situation in Asia where a Taiwan visit from Pelosi is rattling China. Any escalation of tensions could drive down demand for risky assets and commodities.

Later today at 20:30 GMT, traders will get their first look at weekly crude and gasoline inventories numbers. Traders are expecing the American Petroleum Institute’s (API) report for the week-ending July 29 to show a decline in crude oil and gasoline stockpiles.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out $93.01. The next main bottom target is $88.23. A trade through $101.88 will change the main trend to up.

The short-term range is $88.23 to $101.88. The market is currently testing its retracement zone at $95.05 to $93.44.

On the downside, the major support is a retracement zone at $89.54 to $82.80.  The nearest resistance is a pivot at $99.69, followed by a retracement zone at $103.16 to $106.68.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term Fibonacci level at $93.44 is likely to determine the direction of the September WTI crude oil market on Tuesday.

Bullish Scenario

A sustained move over $93.44 will indicate the presence of buyers. The first target is a 50% level at $95.05. A trade through this level could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under $93.44 will signal the presence of sellers. Taking out $92.42 will indicate the selling is getting stronger. This could trigger an acceleration into the long-term 50% level at $89.54, followed by the main bottom at $88.23.