WTI crude oil price trades near $66.40 as demand hopes battle fragile technical setup
WTI crude tests rising channel base near $66.40 as inventory draw and geopolitics collide
WTI crude oil remains under pressure on Friday, trading near $66.40 and down 0.47% in early U.S. hours, as price tests the lower boundary of a multi-week ascending channel. This comes amid growing technical fragility, as the commodity struggles to hold above key short-term moving averages and market sentiment is influenced by both geopolitical and macroeconomic factors.
Highlights
- WTI crude oil trades at $66.40, testing rising channel support with weakening EMA structure
- U.S. crude inventories fall by 3.859 million barrels, but Trump tariff tensions cloud outlook
- Kurdish drone strike halts Iraqi oil production, but market reaction remains subdued
Price action on the 2-hour chart reveals that WTI has failed to hold above the midline of the channel established in late June, with successive lower highs undermining bullish momentum. The current test of the 20 EMA at $66.60 coincides with pressure from the 50 EMA at $66.92 and 100 EMA at $67.10. All are flattening, while the 200 EMA above at $67.15 has turned into resistance. The RSI reads at 44.55 and has struggled to reclaim the neutral 50 level during recent bounces, confirming that buyers are retreating.
USOIL price dynamics (Source: TradingView)
If the price fails to hold above $66.20, a breakdown could open the door to a decline toward the $65.00 handle. Conversely, a bounce from the current level and reclaim of $67.50 would suggest that bulls still have control, particularly if supported by volume and stronger demand signals.
Inventory drop supports price, but trade concerns loom
Fundamental data offered mixed signals. U.S. crude inventories fell by 3.859 million barrels for the week ending July 11, sharply better than the expected 1.8 million draw and reversing the prior week’s 7.07 million-barrel build. This points to healthy seasonal demand.Meanwhile, geopolitical tension flared after a drone attack in northern Iraq halted oil production at a Norwegian-operated facility. While market reaction was muted, any escalation in the region could reduce supply and potentially lift prices.Still, uncertainty persists as U.S. President Donald Trump reiterated plans to impose tariffs on over 150 trade partners. Traders fear that aggressive tariffs could dampen global growth and in turn, oil demand.
In earlier analysis, we highlighted the importance of the $66.20–$66.40 zone in maintaining the bullish structure. With price now testing this area and EMA clusters compressing, the next few sessions will be critical in determining whether bulls can reclaim momentum or whether a deeper breakdown toward $65.00 is imminent.
