WTI crude oil recently busted through a falling trend line on its 1-hour time frame and completed a quick retest. Applying the Fibonacci extension tool shows the next potential upside targets.
Price is already testing the 38.2% level at $61.70 per barrel but seems to have enough bullish momentum to take it to the 50% extension near the swing high and $62 per barrel mark. Sustained bullish energy could take crude oil up to the 61.8% Fib at $62.37 per barrel or the 76.4% level at $62.79 per barrel. The full extension is at $63.48 per barrel.
The 100 SMA just crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that there’s still a chance for the selloff to resume. Then again, crude oil has climbed past the moving averages’ dynamic inflection points as an early indicator of bullish pressure.
Stochastic is pointing up to show the presence of bullish momentum, but the oscillator is nearing the overbought zone to signal exhaustion among buyers. Turning lower would mean that sellers are returning.
Similarly RSI is heading back up after a slight dip from the overbought zone, suggesting that buyers still have some energy left.
Crude oil managed to stay afloat despite the surprise build in stockpiles of 21.6 million barrels versus the estimated reduction of 1.3 million barrels. Traders seem to be keeping closer tabs on the OPEC meetings, as the cartel’s commitment to output cuts could still boost price levels.
However, some say that the OPEC could opt to increase production now that crude oil has recovered past the $60 per barrel, which is a long way off the lows since 2020. If that’s the case, the commodity price could take hits as the increased production could revive fears of a supply glut.
The official OPEC statement is expected later today.