Crude Oil Price Update – Weak China Factory Data Has Traders Targeting $95.05 – $93.44 Retracement Zone

U.S. West Texas Intermediate crude oil futures are edging lower on Monday as weak manufacturing data from China and Japan offset potentially bullish news over OPEC+ output and strong demand for U.S. oil from Europe.

Data from China soured the demand picture over the weekend after the world’s largest crude oil importer reported weak factory data. Traders blamed fresh COVID-19 lockdowns for bringing an end to last June’s brief recovery.

In Japan, manufacturing activity expanded at its weakest rate in 10 months in July, data showed on Monday.

At 11:18 GMT, September WTI crude oil is trading $96.96, down $1.66 or -1.68%. On Friday, the United States Oil Fund ETF (USO) settled at $78.04, up $0.91 or +1.18%.

Traders are also positioning themselves ahead of the OPEC+ meeting on Wednesday, where the group will decide on September output. Two of eight OPEC+ sources in a Reuters survey said that a modest increase for September would be discussed at the August 3 meeting. The rest said output is likely to be held steady.

Crude oil traders are also monitoring the U.S. Dollar at a time when U.S. exports are hitting records. A weak dollar combined with strong demand from Europe is potentially bullish.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $101.88 will signal a resumption of the uptrend. A move through $93.01 will change the main trend to down.

The minor range is $88.23 to $101.88. Its retracement zone at $95.05 to $93.44 is the nearest support.

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

The main 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.

Daily Swing Chart Technical Forecast

Trader reaction to $97.45 is likely to determine the direction of the September WTI crude oil market on Monday.

Bearish Scenario

A sustained move under $97.45 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at $95.05 to $93.44. This is the last potential support before the $93.01 main bottom.

Bullish Scenario

A sustained move over $97.45 will signal the presence of buyers. If this generates enough upside momentum then look for an intraday surge into the short-term pivot at $99.69. Overtaking this level will indicate the buying is getting stronger with the minor top at $101.88 the next target, followed by the main retracement zone at $103.16 to $106.68.