The spot WTI crude oil price, traded on the Chicago Mercantile Exchange, settled at U.S. $44.84 a barrel on Thursday, ahead of the release of the July non-farm payrolls data by the Department of Labor on Friday, with expectations of a 225,000 jobs gain. The crude oil price could bounce off the trendline support if the number turns out to be much weaker than expected. A weak jobs report could send the dollar sharply lower and the crude oil price higher. 

Payroll processor ADP said Wednesday that U.S. private employers added 185,000 workers in July, far below the 215,000 jobs that analysts had expected. Hedge funds placed big bets into the S&P 500 Energy sector today, ahead of the non-farm payrolls report, and drove the sector up 1.58% while the S&P 500 index was down 0.78%. 

The spot WTI crude oil price was unable to break the key technical resistance at U.S. $48.64 a barrel last week due to supply concerns. More trouble for the crude oil came after Iranian Oil Minister Bijan Namdar Zanganeh said on Sunday that Iran can increase its production by 500,000 barrels a day within a week after sanctions end, and by 1 million barrels a day within a month following that. The P5+1 countries, which include the U.S., Russia, U.K., France, China and Germany, reached a nuclear deal with Iran on July 14. The Obama administration submitted the nuclear agreement to the U.S. Congress for review before they vote to accept or reject it in September. 

As of July 28, there are 475,975 long positions of non-commercial contracts of light sweet crude oil futures, traded on the New York Mercantile Exchange by hedge funds and dealers, an increase of about 11,645 long positions from last week, according to the Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) each Friday. This is compared to about 232,556 short positions, an increase of about 21,909 short positions from last week where light sweet crude oil contracts are traded in units of 1,000 barrels. Net short positions have increased about 10,264 contracts, reflecting the slide in crude oil prices last week. 

Technically, there are several supports around the U.S. $40 a barrel level and the crude oil price could bounce off them, as the crude oil price is now trading in oversold territory. The crude oil price could be trading in the range between U.S. $62.84 a barrel, or the 61.8% Fibonacci retracement level, and the U.S. $40 a barrel levels until stable supply-and-demand is established. A breakdown of the U.S. $40 a barrel level could send crude oil back to retest the February 2009 low of U.S. $33.55 a barrel.