WTI Crude Oil Price Analysis for Oct. 3, 2022

WTI crude oil is still trending lower inside its bearish channel, but it looks like the commodity is off to a strong bullish start this week.

Price gapped higher over the weekend and is back to testing the channel resistance at $80 per barrel, perhaps considering a bullish breakout. If that happens, the commodity might be in for a reversal from its selloff.

The 100 SMA is below the 200 SMA, though, so the path of least resistance is to the downside. In other words, the channel top is more likely to hold than to break, possibly sending crude oil back down to the channel bottom around $70 per barrel or lower.

Stochastic is pointing up to show a return in bullish pressure, but the oscillator is also nearing the overbought area to reflect exhaustion among buyers. RSI is on middle ground, barely offering strong directional clues at the moment.

Crude oil gapped higher on rumors that the OPEC could announce a production cut during their meeting this week, following the steady decline in prices. If the cartel agrees to cut by at least 100 million barrels per day, the commodity might be able to sustain its rally.

On the other hand, failing to reach an agreement could mean more bearish pressure for crude oil, as it caves to dollar strength and risk-off flows. Keep in mind that investors remain wary of a global recession and worsening geopolitical tensions from Russia, driving down demand for riskier holdings like commodities.

Still, the upcoming inventory report from the Department of Energy could bring some volatility for crude oil around the middle of the week. Another surprise draw like the previous report might be enough to give the commodity a boost since this would suggest elevated demand.

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