WTI crude oil seems to be done from its climb as price is starting to show the first few signs of reversing from its short-term uptrend. Price has already closed below the ascending trend line on its 1-hour time frame and is testing the 100 SMA dynamic support.
This moving average is still above the longer-term 200 SMA on this time frame, which means that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. A break below this level could still lead to a test of the 200 SMA dynamic inflection point around $72 per barrel.
RSI is on the move up, also signaling that bullish momentum is returning. On the other hand, stochastic is pointing down to indicate that selling pressure is present and could continue to push crude oil lower.
Reports indicating that Iran’s national guard is willing to stop oil exports from the Strait of Hormuz, which is one of the world’s major checkpoints, if the U.S. continues to urge its allies to stop buying Iranian oil led to a slight pop higher. However, the commodity failed to sustain the move as risk aversion appeared to settle in.
Broadcasters in Iran reported that Esmail Kowsari, deputy commander of the Sarollah Revolutionary Guards base in Tehran, said:
Any hostile attempt by the U.S. will be followed by an exorbitant cost for them. If Iran’s oil exports are to be prevented, we will not give permission for oil to be exported to the world through the Strait of Hormuz.
Meanwhile Trump upped the pressure on OPEC to increase production in order to keep a lid on crude oil price, although this call was made on Twitter rather than an official statement. US crude oil inventories are due and a decline in stockpiles was reported.