WTI crude oil is still on a tear as price approaches the top of its ascending channel visible on the 4-hour time frame. If the resistance holds, price could resume the drop to support around $56 per barrel or at least until the mid-channel area of interest.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. Then again, the gap between the moving averages is narrowing to reflect weakening bullish momentum. The 100 SMA is close to the mid-channel area of interest while the 200 SMA lines up with the channel bottom to add extra support.
RSI is in the overbought zone, though, so buyers might be feeling exhausted. Turning lower could confirm a return in selling pressure and a correction from the climb. Similarly stochastic is in the overbought zone to signal exhaustion among buyers and a possible pickup in bearish momentum.
Crude oil is advancing once more on an expected slowdown in US shale production. The EIA downgraded its forecasts for production once again to 12.1 mb/d of oil production this year. This could go on until early next year, removing some of the market competition for WTI crude oil and keeping its demand supported.
Meanwhile, the IEA released its Oil 2019 report March 11, including forecasts up to 2024. It predicts that the boom in shale could also wind down, which is long-term positive for crude oil.
Traders are waiting on the data from the API and EIA next to see how production and demand factors are contributing to inventories. A large build could revive oversupply concerns while a reduction could mean that demand is able to keep up with supply. Note that OPEC output curbs are still in place, along with US sanctions on Venezuela’s oil exports.