Crude Oil Price Update – Tight Range as Traders Hope G7 Provides Catalyst for Next Move

U.S. West Texas Intermediate crude oil futures are trading mixed early Monday as investors await the next catalyst to drive the price action. Ahead of the start of the New York session, traders were monitoring the events at the Group of Seven (G7) nations in Germany for potential announcements that could affect the current supply tightness.

In other news, traders are expecting OPEC and its allies, known as OPEC+, to stick with its plan for accelerated oil output increases in August when it meets on June 30. In early July, President Biden is scheduled to visit Saudi Arabia. The trip is likely to make headlines, but it would come as a surprise if Biden were able to influence Saudi oil policy.

At 08:48 GMT, August WTI crude oil is trading $107.46, down $0.16 or -0.15%. On Friday, the United States Oil Fund ETF (USO) settled at $81.24, up $2.26 or +2.86%.

The more pressing news currently controlling the price action are growing concerns over the potential for a global recession. Helping to save the market from an even bigger loss last week, however, was a weaker U.S. Dollar and a rebound in U.S. stock markets.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $100.66 will change the main trend to down. A move through $120.88 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $116.58 will change the minor trend to up.

The main range is $86.81 to $120.88. Its retracement zone at $103.85 to $99.82 is support. This zone stopped the selling at $101.53 on June 22.

The minor range is $116.58 to $101.53. The first upside target is its pivot at $109.06. The short-term range is $120.88 to $101.53. Its retracement zone at $111.21 to $113.49 is the primary upside target area.

Daily Swing Chart Technical Forecast

Trader reaction to $105.64 is likely to determine the direction of the August WTI crude oil market on Monday.

Bullish Scenario

A sustained move over $105.64 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the first pivot at $109.06. Overtaking this level is likely to trigger an acceleration into the short-term retracement zone at $111.21 to $113.49.

Bearish Scenario

A sustained move under $105.64 will signal the presence of sellers. If this generates enough selling pressure then look for the move to extend into the main 50% level at $103.85.

Buyers could come in on the first test of $103.85. If it fails, however, then look for a further break into last week’s low at $101.53, followed by the main Fibonacci level at $99.82.