WTI crude oil is trending higher as it formed higher lows on the 1-hour time frame, moving above an ascending trend line on its 1-hour time frame. Price hit resistance at the $60 per barrel mark and is in the middle of a pullback to the 61.8% level around $58.50 per barrel mark.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. The 100 SMA is also in line with the 61.8% level to add to its strength as support. A break below this could set off a reversal from the climb.
RSI is heading south to show that selling pressure is in play, but the oscillator seems to be turning higher before crossing the center line. Stochastic is also starting to turn up after recently dipping close to the oversold region, indicating that buyers are ready to return and push price to the swing high.
Crude oil enjoyed a strong rally thanks to a larger than expected draw in stockpiles. The EIA reported that inventories were down 12.8 million barrels versus the expected reduction of 2.7 million barrels and the earlier reduction of 3.1 million barrels.
Apart from that, risk appetite appears to be stronger as central banks are shifting to more dovish stances. The prospect of lower interest rates could encourage businesses and consumers to spend, which would then be positive for commodity demand.
Apart from that, speculations of an extension in the OPEC output deal could also be propping prices up. The kingdom reportedly would like to see crude oil past the $60 per barrel mark in order to attract more investors, which might then mean more production caps. Also, Middle East tensions are limiting supply, thereby keeping prices afloat.