WTI crude oil looks ready to resume its rally as it bounced off the mid-channel area of interest. Price is now setting its sights on the top of the ascending channel on the 4-hour time frame.

The 100 SMA is above the longer-term 200 SMA on this chart to confirm that the path of least resistance is to the upside. This means that the rally is more likely to continue than to reverse. The 200 SMA also held as dynamic support but the gap between the moving averages is narrowing to indicate weakening bullish momentum.

Stochastic is pointing up to confirm that buyers are in control of crude oil price action. RSI has more room to climb so buyers could have the upper hand for a bit longer, probably until price tests the recent highs or makes it up to the channel resistance at $60 per barrel. Selling pressure could return as both oscillators are approaching overbought levels.

Another pipeline reportedly shut down, which means lower supply flowing in the US and a larger depletion of inventories. A North Sea pipeline shut for repairs and this transports a significant portion of the area’s output. Repairs could take weeks, which would mean a prolonged period of lower supply.

In the previous week, Baker Hughes reported an increase in US oil rigs so supply could tick higher in the coming week. Traders could take their cues from the stockpiles as reported by the American Petroleum Institute and the Energy Information Administration, with a draw in inventories likely lifting the commodity higher.

Apart from that, dollar price action and overall market sentiment could hinge on the FOMC decision, as well as the other central bank announcements lined up. This could shape expectations for tightening next year, likely influencing business activity and demand for commodities.