WTI crude oil seems to have completed a shallow pullback to the area of interest at the $70 per barrel major psychological mark. If that’s the case, price could climb to the bullish targets marked by the Fib extension tool.
The 38.2% level is close by at $71.33 per barrel and the 50% level is at $71.75 per barrel. Stronger bullish pressure could take crude oil to the 61.8% extension at $72.18 per barrel or the 76.4% level at $72.71 per barrel. The full extension is at $73.38 per barrel.
The 100 SMA is above the 200 SMA to confirm that the climb is more likely to gain traction. The gap between the indicators is also widening to reflect strengthening bullish momentum.
Stochastic is on the move up to show that buyers are in control, but the oscillator is approaching the overbought zone to signal exhaustion soon. RSI has more room to climb, so buyers could stay in the game for much longer.
Crude oil is drawing support from expectations that a large draw in stockpiles will be reported due to the disruption in production over the past week. Hurricane Ida led to a number of facilities being shut-in, with some still offline since repairs are needed.
A reduction of 3.6 million barrels is eyed, following the earlier drop of 1.5 million barrels. An even larger draw could signal that demand has picked up over the past week or that the damage to production facilities was larger than expected.
A surprise build, on the other hand, might mean that demand also took a hit recently. The API reported a draw in crude oil inventories of 5.437 million barrels for the week ending September 10. This was higher than expectations of a draw of 3.903 million barrels and the earlier reduction of 2.882 million barrels.