WTI crude oil continues to trend higher on its 4-hour chart, as price is moving above a rising trend line that’s been holding since mid-September.

The commodity is still in correction mode, though, and price is about to test the 50% Fibonacci retracement level. This lines up with the trend line and a former resistance level around $76 per barrel.

If support holds, crude oil could recover to the swing high at $79.75 per barrel or higher. A break lower might still find buyers at the 61.8% Fib around $75.88 per barrel.

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

Stochastic is still on the move down but already dipping into the oversold region to signal exhaustion. Turning back up would confirm that buyers are returning while sellers take a break.

Crude oil took some hits after the Energy Information Administration reported a build of 2.3 million barrels, which is higher than the expected increase of 0.8 million barrels. Still, this is lower compared to the earlier increase of 4.6 million barrels, suggesting a pickup in demand.

Then again, the supply crunch coming from weather disruptions a few weeks back likely affected inventory levels as well. Other weather disturbances are on the horizon and might continue to keep output limited.

Also, note that the OPEC agreed to maintain its production deal to increase output by 400K barrels per day until the end of the year. The cartel refused to give in to pressure to increase production in order to keep price rallies in check, which means that the commodity could continue to enjoy upside if demand keeps rising.