WTI Crude Oil Price Analysis for June 3, 2020

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WTI crude oil could be in for more gains as it completed an upside break and retest of its channel resistance. The Fibonacci extension tool shows how high prices could go from here.

The 38.2% level is around the $36 per barrel mark then the 50% level is at $36.65 per barrel. Stronger bullish momentum could take crude oil up to the 78.6% Fib at $38 per barrel or the full extension at $39 per barrel.

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 gain traction than to reverse. The gap between the indicators is widening to reflect strengthening bullish momentum, and the 100 SMA seems to have held as dynamic support.

RSI is turning lower without even hitting the overbought zone, however, so a return in selling pressure might be in order. Stochastic also looks ready to top out and price could follow suit as it heads south.

Crude oil is on better footing lately as traders are hopeful that the OPEC could extend its output cuts in order to keep the market stable. The OPEC meeting with Russia is coming up soon and an agreement to limit production for much longer could mean more gains for the commodity price.

Keep in mind that the cartel pushed up the timeline for its meeting to discuss the future of the group’s current oil production cut plans which are set to expire at the end of June.

Apart from that, a surprise draw in crude oil stockpiles also supported the idea of demand picking up. The American Petroleum Institute reported a small crude oil inventory draw of 483,000 barrels for the week ending May 29 versus analysts expectations of a build of 3.038 million barrels and the earlier increase of 8.731 million barrels.

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