WTI Crude Oil Trends Lower, Key Support Level Holds

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.