WTI crude oil has been trending higher, moving inside an ascending channel on its 4-hour time frame. Price is currently testing the channel resistance and might be due for a pullback to support.

Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level coincides with support at $51 per barrel. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside.

In addition, the moving averages coincide with the area of interest around the channel support and 61.8% Fib. Bulls are likely waiting around this area to join in the ongoing rally.

Stochastic is turning lower to show that selling pressure is taking hold, which means that a correction is likely to happen soon. RSI is also heading south from overbought levels so WTI crude oil could follow suit.

Crude oil continues to rake in gains despite reports that OPEC member nations are considering exiting their output deal soon. This could have a contrasting effect to an extension of the production agreement until the end of 2018, but has also somehow reassured investors that the cartel won’t flood the market with supply once the output cap is lifted.

Sources reported that this exit plan would be similar to tapering strategies implemented by central banks when it comes to asset purchases to ensure a gradual impact on financial markets.

“I think there’s a consensus among the collective that we should keep that extension and indeed even deeper cuts if we need for as long as it takes to firm up the market,” Nigeria’s Minister of State for Petroleum Emmanuel Ibe Kachikwu said at the Africa Oil Week conference in Cape Town. “If the aggressiveness of shale production continues at the pace that it is, you’re likely to see for quite a while an extension of this cooperation.”