U.S. West Texas Intermediate crude oil futures declined on Friday, erasing all of its earlier gains in a volatile trading session. A late session sell-off in the U.S. stock market combined with a steep drop in U.S. heating oil futures were the catalysts behind the weak price action. The nearby heating oil futures contract plummeted by more than 20% at one point on the day of its expiration.
On Friday, June WTI crude oil settled at $104.69, down $0.67 or -0.64%. The United States Oil Fund ETF (USO) finished at $77.18, down $0.90 or -1.15%.
According to Reuters, the front-month U.S. heating oil contract, which is proxy for diesel prices, soared to a record high of $5.8595 a gallon before falling as low at $4.4067 a gallon. Diesel futures have climbed as investors worry about tight supplies globally following Russia’s invasion of Ukraine.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $109.20 will reaffirm the uptrend. A move through $95.28 will change the main trend to down.
The short-term range is $121.17 to $90.37. Its retracement zone at $105.77 to $109.40 is resistance. This zone stopped the buying on Friday at $107.99.
On the downside, the first support is a pivot at $102.24, followed by a minor retracement zone at $100.90 to $98.94.
Short-Term Outlook
The main trend may be up, but Friday’s formation of a minor closing price reversal top suggests momentum may be getting ready to shift to the downside.
At the start of Monday’s trade, the chart formation suggests prices could weaken on a sustained move under $105.77 with a cluster of levels at $102.24, $100.90 and $98.94, potential downside targets.
Since the main trend is up, buyers could return between $102.24 and $98.94.
The most bullish sign on the chart will be a breakout over the short-term Fibonacci level at $109.40. But buyers will have to overcome a 50% level at $105.77, a closing price reversal top at $107.99 and a main top at $109.20 before we’ll see the breakout.
Taking out $109.40 could trigger an acceleration to the upside with $113.51 the next major target.
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This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/june-wti-crude-oil-weakens-203030001.html