WTI crude oil continues to trend lower inside a descending channel visible on the 1-hour chart. Price is finding support at the mid-channel area of interest and could be due for another test of resistance or perhaps a break higher.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is more likely to hold than break and resistance is more likely to be broken. In that case, a reversal from the downtrend might follow. For now, though, price is finding dynamic resistance at the moving averages.
RSI has room to head up before reaching the overbought zone to indicate exhaustion among buyers. However, the oscillator also seems to be ready to head back down to reflect a return in selling pressure. If so, price could make its way back down to the channel bottom close to $63 per barrel.
Stochastic is still pointing up to suggest that buyers have the upper hand and could push for some gains, at least until the channel top just past $64 per barrel.
Crude oil encountered additional volatility, likely as traders booked profits or closed off their positions ahead of the shortened trading week. Still, there is evident upside pressure as Saudi Arabia affirmed its commitment to output cuts.
According to data from the Joint Organizations Data Initiative, the kingdom’s exports fell by 277,000 barrels per day just under 7 million bpd in February from the month before. Aside from that, data from Baker Hughes showed a reduction of 8 rigs in US oil drillers.
Prior to that, US crude oil inventories also reported declines in the previous week, signaling how demand is supported and easing oversupply concerns for the time being. Recall that this comes after consecutive weekly gains, so the reduction was a welcome sign for bulls.