Crude oil inched higher on Friday, increasing the price of West Texas Intermediate (WTI) to more than $54 a barrel following the release of US crude oil inventory report. The technical bias remains bullish because of a higher low and higher high in the ongoing upside move.
Technical Analysis
As of this writing, the black gold is being traded around $54.28 a barrel. A hurdle can be seen near 55.20, the horizontal resistance area ahead of $63.12, the swing high of the last major upside rally as demonstrated in the given below weekly chart. A break and daily closing above the $63.12 resistance shall incite renewed buying interest, validating a move towards the $70.00 resistance zone.
On the downside, the US crude oil is expected to find a support near 52.04, the horizontal support area ahead of 42.83, another critical support zone and then $40.00, the psychological level. The technical bias shall remain bullish as long as the $39.57 support area is intact.
US Crude Oil Inventory
U.S. crude stocks unexpectedly rose for the second straight week, data from the U.S. Energy Information Administration showed, gaining 614,000 barrels last week versus analysts’ forecasts of a decline of 2.1 million barrels. At the Cushing, Oklahoma, delivery hub for U.S. crude futures, inventories rose 172,000 barrels, the EIA said.
Trade Idea
Considering the overall technical and fundamental outlook, buying the WTI on dips – around $52.00 level – appears to be a good strategy.