WTI crude oil keeps trending higher as it formed higher lows and higher highs inside an ascending channel on its 4-hour chart. Price already seemed to break below support but pulled right back up and landed above the mid-channel area of interest.
The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. However, the gap between the indicators is narrowing to reflect weakening bullish pressure. Still, price is above both moving averages to show that buyers have the upper hand.
RSI is already indicating overbought conditions or exhaustion among buyers. Stochastic is also in the overbought territory but could be due to turn lower soon, reflecting a return in selling pressure. In that case, another test of the channel bottom could be in the works.
Crude oil got a boost from inventory data as inventories decreased by 4.9 million barrels for the week ending Nov. 29 versus the projected reduction of 1.5 million barrels. Traders are also anticipating production cuts or at least an extension of the current agreement among OPEC members and Russia.
The cartel will be meeting in Vienna this week to discuss their outlook for the market and the moves they could take in order to stabilize prices. Iraqi oil minister Thamer Ghadhban told reporters in Vienna on Tuesday that “a deeper cut is being preferred by a number of key members.”
Apart from that, crude oil is also waiting for more updates on the US-China trade talks as indications that “phase one” of the deal could move forward might eventually lead to the tariffs on the commodity being lifted soon.