WTI crude oil continues to gain traction on its climb as it moves up to the 76.4% Fibonacci extension level. Stronger bullish momentum could take it up to the full extension at $67.70 per barrel.
Technical indicators are giving mixed signals on where price might be headed next. The 100 SMA is above the 200 SMA to confirm the presence of bullish momentum that might be enough to take crude oil to the next upside target.
On the other hand, stochastic is already indicating overbought conditions or exhaustion among buyers. Turning lower could lead to a dip back to nearby support zones. RSI is also starting to turn lower from the overbought region to signal a return in selling pressure.
Crude oil would likely take its cue from the inventory reports lined up. The American Petroleum Institute just reported a large draw of 7.688 million barrels for the week ended Apr. 30 versus the build of 4.319 million barrels recorded during the previous week.
The EIA crude oil inventories report might then show a similar reduction, with analysts projecting a draw of 1.9 million barrels. If the report surprises to the upside, it would be indicative of stronger demand conditions or weaker supply levels, both of which would be bullish for the commodity.
Risk sentiment could also determine where crude oil prices are headed next. In particular, central bank decisions like that of the BOE and jobs data from the US and Canada might impact investors’ outlook and demand for higher-yielding assets.
Optimistic remarks from central banks could confirm that the economy has turned a corner and that businesses and consumers could see stronger activity down the line, thereby supporting demand for fuel and energy commodities. At the same time, upbeat jobs data could ensure that these green shoots would be maintained.