WTI buyers are not ready to accept the 70 level loss

WTI oil came under strong selling pressure at the end of last week. It tested the level of June lows, but still remained above 67. A strong rebound followed, which made up for almost all of Friday's losses. Yesterday's attempt to resume the decline led to nothing, the drawdown was bought out again. This time WTI will probably not stay below $70/bbl for a long time.

New stimulus measures for the Chinese economy should support oil demand and prices. Premier Li Qiang said today at the Tianjin conference that China's economy will expand steadily in the second quarter of 2023. No exact figures for GDP were given, but Li Qiang said the economy was growing faster than the previous quarter (4.5%). China's annual GDP growth target of at least 5% was also confirmed.

As for oil supply, Saudi Arabia will be the focus of market’s attention in the coming weeks. In July Saudi Arabia should start cutting its oil production by 1 million barrels per day. As a result, daily oil production in the country will drop to about 9 million barrels. Except for the pandemic period, this will be the lowest level of production since 2011.

According to Bloomberg, Saudi Arabia is seeking to maintain market share in Asia. Because of that, oil supplies to the U.S. will be reduced first. This may become a significant growth factor for WTI, while the effect on Brent prices will be weaker.

Oil prices, which seems to look moderately optimistic after Friday's drawdown, is now struggling for the important 70 level. In case it is broken through, bulls may push WTI even a bit higher, to 70.8.

Consider the following trading strategy:

Buy WTI oil in the 69–69.5 range. Take profit 1 — 70. Take profit 2 — 70.8. Stop loss — 68.7. 

Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion.