Crude Oil Price Update – Sustained Move Over $94.45 Pivot Puts $99.22 on Radar

U.S. West Texas Intermediate crude oil futures closed higher on Thursday after the International Energy Agency (IEA) raised its oil demand growth forecast for 2022 as soaring natural gas prices have some consumers switching to oil.

Sweltering summer temperatures and soaring gas prices have boosted the use of oil in power generation, the IEA said on Thursday, increasing demand but masking weakness in economies beset by recession fears.

On Thursday, September WTI crude oil futures settled at $94.34, up $2.41 or +2.62%. The United States Oil Fund ETF (USO) finished at $76.25, up $1.93 or +2.60%.

The news from the IEA surprised traders, triggering a short-covering rally and offsetting concerns over Russian-led supply disruptions and heightened worries about a possible global economic slowdown.

Traders were also watching closely a possible supply disruption after top U.S. Gulf of Mexico oil producer Shell said a pipeline lead prompted it to halt production at three U.S. Gulf of Mexico deepwater platforms designed to produce up to 410,000 barrels of oil per day combined.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $101.88 will change the main trend to up. A move through $87.01 will signal a resumption of the uptrend.

The minor trend is up. This is controlling the momentum. A trade through $87.66 will change the minor trend to down.

The short-term range is $101.88 to $87.01. The market was testing its pivot at $94.45 at the close.

On the downside, the major support is a long-term retracement zone at $89.54 to $82.80.

On the upside, the nearest target is a pivot at $99.22. The major resistance is a retracement zone at $102.55 to $106.21.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at $94.45 is likely to determine the direction of the September WTI crude oil market early Friday.

Bullish Scenario

A sustained move over $94.45 will indicate the presence of buyers. If this move creates enough upside momentum then look for an acceleration into the short-term pivot at $99.22.

Bearish Scenario

A sustained move under $94.45 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the long-term 50% level at $89.54.