WTI Crude Oil Price Analysis for Jan. 13, 2022

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WTI crude oil is still testing the resistance at the top of its rising channel around the $83 per barrel mark. If this keeps holding, a pullback to nearby support areas marked by the Fib tool could follow.

The 38.2% level is at $81 per barrel then the 50% level is at $80.44 per barrel. The 61.8% level is near the $80 per barrel major psychological support and the channel bottom. This is also near the 100 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is still above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break. If any of the Fibs are able to keep losses in check, price could resume the climb to the swing high or the channel top.

Stochastic is turning lower to show that selling pressure is in play, possibly allowing the correction to keep going until oversold conditions are met. RSI is also on the move down to show that sellers are regaining the upper hand.

If the area of interest at the channel support is broken, crude oil might be in for a reversal from its uptrend.

The latest EIA inventory report printed a larger than expected draw of 4.1 million barrels in crude oil stockpiles, marking the seventh consecutive weekly drop. It also confirms that demand remains strongly supported despite concerns around the Omicron variant and some travel restrictions in a few nations.

Optimistic remarks from the Fed earlier this week could also keep crude oil supported, as policymakers appear confident that the US economy could weather the latest wave of the pandemic.

Still, there are plenty of concerns about the rising number of cases that might prompt another set of lockdowns. If that’s the case, business and consumer activity could take huge hits and weigh on purchases of fuel and energy commodities.

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