The WTI Crude Oil Futures (NYMEX: CL) have gained nearly 3% week-to-date as a rebound from the lows set in December 2021 is in progress. With signs of a slowing U.S. economy and weakening Chinese manufacturing, selling pressure built up in the prior weeks as traders feared a potential recession could soften oil demand.

The U.S. and Chinese economies showed further signs of cooling this week, with inflation slowing in both the mighty economies. Traders will turn their attention to today’s U.S. Labour Market report to determine if slowing in the largest economy in the world is indeed in progress.

Technical

The WTI Crude Oil Futures sold off to put the market into a downtrend, with price breaking below the 100-day moving average. Support ad resistance was established at the $63.65 and $76.90 per barrel (BLL) levels, respectively.

A sharp rejection of support led price northwards, with bulls in contention to regain a grip over the market. Price action stalled just above the 61.80% Fibonacci Retracement level at $71.91 BLL, with bulls and bears looking to economic data for price rediscovery.

If bullish traders push forward, the $76.90 BLL level will likely be in the picture. Given that volumes support, upside price action could retrace toward the 100-day moving average or the 100% Fibonacci Retracement level forming resistance. Alternatively, if bears look to regather their momentum, a reversal towards the $63.65 BLL level could be validated by a high volume breakdown below the 50% Fibonacci Retracement level.

Summary

The U.S. Crude Oil Inventory count came in much higher than the draw (decline), which was expected, signalling weaker demand for the week. However, the central theme driving the commodities market will likely be the sentiment surrounding the potential of a recession. Traders will probably eye the $63.65 and $76.90 BLL for short-term opportunities.

Sources: U.S. Energy Information Administration, Reuters, TradingView