- Summary:
- Crude oil prices have been on the decline for the most part in June, but seem to have reached a potential reversal point.
Oil prices steadied on Tuesday as focus remained on the commodity’s demand outlook for the summer. Brent crude price was up by 0.6 percent to trade at $82.71 per barrel, while WTI was at $78.56, having risen by 0.4 percent at press time. The commodity has been on a steady decline in July, with WTI down by 3.6 percent and Brent down by 2.7 percent, a week to the end of the end of the month.
The American Petroleum Institute (APA) will release its inventory figures on Tuesday, which will provide perspective on the demand-side outlook for oil. That could provide some volatility as the market waits for official figures from the Energy Information Administration (EIA) on Wednesday.
Momentum indicators
The MACD indicator on Brent crude price signals control by the sellers, as the MACD line recently closed below the signal line. This underpins dominance by the downside momentum, supporting likely continuation of losses. Also, the current price is below the 7-SMA which has also crossed below the 30-SMA recently. That also calls for further downside.
Weekly support and resistance
On Brent’s daily price chart, the neckline from a double-top is at $82.00. The commodity made an attempt to cross below that mark on Monday but was rejected. However, as seen on the chart, a previous successful breach below that mark resulted in declines that drove the price to four-month lows. Therefore, the $82.00 mark fits the bill as the support level this week. On the upper side, Brent price got rejected at $88.00. Therefore, any potential reversal will likely meet resistance at that mark. Meanwhile, WTI got rejected at $85.00, making this an upper resistance level for the commodity.
Intraday support and resistance
The momentum on WTI crude price calls for further downside if resistance persists at the 78.75 pivot. With the sellers in control, the first support will likely come at 78.75, but extended control by the sellers could break that mark and potentially strengthen the downward momentum to test the next support at 77.55. Conversely, a break above 78.75 will favour the buyers to take control. With the buyers in control, the next resistance will likely come at 79.10. A break past that mark will strengthen the upside momentum and invalidate the downside narrative. Also, it could take the price higher to the second resistance at 79.75.
