WTI crude oil is trending higher inside a rising channel, but it might be due for a bullish breakout and a steeper climb. Price is testing the resistance around $71 per barrel, and technical indicators suggest a continuation of the uptrend.

The 100 SMA is back above the 200 SMA to confirm that the path of least resistance is to the upside or that the top of the channel is more likely to break than to hold. Stochastic and RSI both have more room to climb before settling into the overbought zone, so buyers might still have some energy left for more gains.

However, these oscillators are also near the overbought regions, so turning lower would mean that bears are taking over while bulls take a break. This could lead to a pullback to nearby support levels, such as the channel bottom around $69 per barrel or the mid-channel area of interest at the $70 per barrel major psychological mark.

The moving averages are also close to the middle of the channel, adding to its strength as potential support.

Crude oil prices remain elevated, as production along the Gulf States mostly remains offline due to Hurricane Ida. Another tropical storm is on the horizon, possibly leading to another round of shut-ins.

The upcoming inventory reports from the API and EIA should indicate how much damage the weather disturbances caused on output, and a large draw is expected. However, a small reduction or a build in stockpiles might suggest that demand is also falling.

In addition, US CPI data might also impact risk appetite and commodity price action. After all, a strong pickup in price pressures might revive talks of an earlier taper, likely weighing on business and consumer sentiment. Weak data, on the other hand, could mean that economic stimulus would stay in play for longer.