Crude oil continues to advance, as price is now testing the top of its ascending channel on the 4-hour chart. If resistance holds, a pullback to nearby support levels might draw more buyers in.

A bullish flag seems to be forming at the channel top, and a break higher could take crude oil well past the $80 per barrel mark.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that resistance is more likely to break than to hold. The gap between the indicators is widening to reflect strengthening bullish momentum.

However, stochastic is already indicating overbought conditions or exhaustion among buyers. Turning lower would mean that a correction is in order. This could take crude oil down to the channel bottom around $75 per barrel or the mid-channel area of interest at $77.50 per barrel.

RSI is also in the overbought zone and is showing a bearish divergence. Price made higher highs while the oscillator had lower highs, indicating that sellers might regain the upper hand soon.

Crude oil is enjoying bullish momentum, as the OPEC decided to stick with its current production deal to boost output by 400K barrels per day until December. This comes even after a lot of pressure from some nations to increase production again in order to keep prices in check.

The upcoming inventory figures from the API and EIA would likely lead to near-term volatility, as these would provide insight on supply and demand conditions. Another draw in stockpiles would mean that demand remains strongly supported, especially with more businesses reopening or resuming normal operations.

In that case, crude oil might be poised for more gains, as traders anticipate more reductions to supply in the coming months.