WTI Crude Oil Price Analysis for May 3, 2021

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WTI crude oil is still in correction mode but appears to be finding buyers at the mid-channel area of interest. If this is enough to keep losses in check, price could recover to the targets marked by the Fibonacci extension tool.

The 38.2% level is at $64.84 per barrel then the 5o% level is at $65.41 per barrel. The 61.8% extension lines up with the channel top around the $66 per barrel major psychological mark. Stronger bullish momentum could take crude oil up to the 76.4% level at $66.67 per barrel or the full extension at $67.80 per barrel.

The 100 SMA just crossed 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. These moving averages also line up with the bottom of the channel to add to its strength as a floor at $62 per barrel in the event of a larger pullback.

Stochastic is pointing down to show that there is some selling pressure in play, but the oscillator is dipping close to the oversold region to signal exhaustion among sellers. Turning higher could meant that buyers are ready to take over. RSI, on the other hand, has plenty of room to move south, so the correction could keep going.

Fears of weaker demand from India, as COVID-19 cases and deaths continue to surge, are keeping a lid on crude oil rallies these days. However, a likely pickup in purchases among economies that have reopened could sustain demand.

The upcoming inventory reports from the EIA and API would shed more light on supply and demand conditions, as another draw in stockpiles could mean gains for the commodity. A large build, on the other hand, would signal that purchases remain shaky and possibly lead to a larger dip.

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