WTI crude oil broke past the short-term resistance previously highlighted and is pulling back for a retest. If this support holds, the commodity could make its way up to the Fibonacci extension levels next.
The 61.8% Fib extension lines up with the swing high at $72.20 per barrel and could hold as a ceiling. Stronger bullish pressure could take it up to the 78.6% extension at $72.47 per barrel or the full extension at $72.82 per barrel.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside or that the uptrend is more likely to continue than to reverse. Price found support at the rising trend line that coincides with the 100 SMA dynamic inflection point as well.
Stochastic is already moving up after making its way out of the oversold region to show that buyers are in control of the game. Similarly RSI is also moving up so WTI crude oil could follow suit.
The API reported a surprise build in crude oil stockpiles for the previous week, but the commodity seemed to shrug off this report as the EIA figure showed a larger than expected draw. Looming sanctions on Iran are keeping traders wary of output disruptions, which could further dampen global oversupply concerns. Falling output from Venezuela are also keeping oversupply worries in check.
Earlier on, the OPEC remarked that current oil prices aren’t that high, reducing the risk of the cartel ending the output deal sooner than the actual deadline by the end of the year. This also suggests that the group could continue its production caps even after oil hits $80 per barrel.
Looking ahead, geopolitical risk relating to Iran could continue to prop the commodity up, even as risk appetite usually weakens on rising tensions. However, fears of a trade war could keep a lid on price gains.