WTI crude oil continues to trend higher on its 1-hour chart as it tests the bottom of its ascending channel. If this keeps losses in check, price could recover to the next upside targets.
The Fibonacci extension tool shows where buyers are setting their sights. The 38.2% level lines up with the $70 per barrel major psychological mark while the 50% Fib is closer to the mid-channel area of interest.
Sustained bullish pressure could take crude oil to the 61.8% extension at $70.51 per barrel or the 76.4% level at $70.81 per barrel. The full extension is at $71.31 per barrel near the channel resistance.
The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break.
Stochastic already made it down to the oversold region to signal exhaustion among sellers, so turning higher would mean that buyers are taking over. RSI is still on the move down but nearing the oversold region to suggest that sellers need a break.
The Energy Information Administration reported a larger than expected draw of 5.2 million barrels in stockpiles versus the projected drop of 3.3 million barrels.
This reflects stronger demand conditions, as the reopening of several economies led to a boost for business and consumer activity. In turn, this has lifted purchases of fuel and energy commodities like crude oil.
The upcoming Baker Hughes oil rig counts report could also impact crude oil movements, but it’s important to note that the OPEC+ recently reaffirmed their commitment to the output deal.
This means that supply would likely remain limited in the region, which would ease global glut concerns. The cartel hinted they’d like to see evidence of stronger demand before adjusting their production agreement, so crude oil could continue to enjoy more upside in the near-term.