WTI crude oil is trending higher on its 1-hour time frame as price formed higher lows and higher highs inside a rising channel. Price is currently testing the resistance and could be due for a pullback to support around $56 per barrel.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level lines up with the mid-channel area of interest around $57.21 per barrel and is also close to the 200 SMA dynamic inflection point. A larger correction could dip until the 61.8% level at $56.77 per barrel.
The 100 SMA just crossed above the 200 SMA to confirm that the path of least resistance is to the upside or that the uptrend is more likely to gain traction than to reverse. A shallow pullback could already find support at the 38.2% Fib around $57.75 per barrel.
RSI is still pointing down, though, so selling pressure is in play. The oscillator has room to head south before reaching the oversold region to indicate that sellers are exhausted and that buyers are ready to take over. Stochastic is also on the move down to show that there is some selling pressure left but that the drop could be over soon.
Crude oil got a strong boost from reports that the OPEC+ is expected to announce an agreement to reduce crude oil output further by 500,000 in order to keep prices stable. Some say that the cartel might simply extend their output deal by a few more months to ensure that prices stay supported.
Meanwhile, the commodity also got a lift from the EIA report that revealed a draw of 4.9 million barrels for the week to November 29, after a 1.6-million-barrel increase reported for the previous week. Analysts expected an inventory decline of 1.798 million barrels .