The surprise EIA crude oil inventory statistics from Wednesday have fostered bearish participation in the oil markets. WTI crude is in the process of posting a three-day losing streak, the first since early March. It appears that $75.00 crude by Memorial Day is a waning possibility.

As of this writing, July WTI futures are trading in the vicinity of $71.00, down more than 75 cents on the session. Selling has been the story, with price rejecting a key area of Fibonacci support on the daily time frame.

WTI Crude Oil Technicals

In an update from Wednesday, I outlined a long scalping plan for July WTI futures. The trade went unelected until this morning, shortly after the traditional 9:00 AM EST energy futures pit open.

As you can see from the chart, the 38% current wave retracement of $70.56 proved to be valid support. Buyers stepped in just above the $70.50 handle and drove price back above $71.00.

In case of a late-day bearish trend, here are the downside levels to watch going into Friday’s session:

• Support(1): 38% Retracement of Current Wave, $70.56
• Support(2): Bollinger MP, $69.86
• Support(3): Daily SMA, $69.11

Overview: The odds of price running another dollar to the bear before today’s close are slim. However, we may see a washout of the intraday session low of $70.52. If this occurs, then a test of $70.00 and the lower downside support levels is likely by Friday’s close.