WTI crude oil continues to trend higher inside its rising channel on the 4-hour chart and seems to be enjoying stronger bullish momentum. A short-term rising trend line can be drawn connecting the lows since the start of the month. Price bounced off this short-term trend line once more, as it also lined up with the mid-channel area of interest around $115 per barrel and the 100 SMA dynamic support. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support levels are more likely to hold than to break. Stochastic is heading north, so price could follow suit while buyers have the upper hand. However, the oscillator is approaching the overbought region to reflect exhaustion among buyers. This suggests that the highs around the channel top and $120 per barrel mark might keep gains in check. On the other hand, RSI is heading lower to suggest that there is some bearish pressure in play. If so, crude oil might carry on with a larger correction to the channel bottom near the 200 SMA dynamic support and $110 per barrel mark. Crude oil is enjoying strong support from the EU decision to embargo most of Russian oil by the end of the year. Talks had been held up by Hungary, but it looks like the bloc is pushing through with its ban soon. However, an OPEC decision to increase their production targets might keep crude oil gains in check since this would ease fears of a global supply crunch. The cartel is rumored to be considering removing Russia from its output deal so that some member nations can be able to pump more oil. The upcoming NFP release might have an impact on overall market sentiment, likely impacting crude oil action before the week comes to a close.

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WTI crude oil continues to cruise higher inside its rising channel on the 1-hour chart and is on its way to test the resistance at $70 per barrel. Stochastic has been indicating overbought conditions for some time, which means that buyers would likely book profits at this psychological level soon. Turning lower could spur a dip back to nearby support levels, like the channel bottom at $68 per barrel or the mid-channel area of interest at $69 per barrel. RSI is also approaching the overbought zone to signal exhaustion among buyers, and heading down could confirm that sellers are returning. The 100 SMA is above the 200 SMA, though, so the path of least resistance is to the upside. In other words, support levels are more likely to hold than to break. Resistance at the channel top might even be broken, leading to a steeper climb for crude oil. Analysts are expecting a draw of 1.0 million barrels in EIA stockpiles, which would be slightly lower compared to the earlier reduction of 1.7 million barrels. This could mean that demand has weakened a bit or that supply is elevated. Still, the commodity is able to draw support from the OPEC+ decision to maintain its output deal even as prices continue to rise. This could mean even more upside for crude oil as supply is constrained. The upcoming NFP release might also impact commodity price action since this affects risk appetite in general. Traders are on the lookout for more clues that the Fed could start tapering soon, and a strong jobs figure could do just that. A weak result, on the other hand, could dash hopes of tightening anytime soon, which might then be bullish for commodities like crude oil. After all, low borrowing costs for longer would prop up business and consumer activity.

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WTI crude oil could be in for more gains as it completed an upside break and retest of its channel resistance. The Fibonacci extension tool shows how high prices could go from here. The 38.2% level is around the $36 per barrel mark then the 50% level is at $36.65 per barrel. Stronger bullish momentum could take crude oil up to the 78.6% Fib at $38 per barrel or the full extension at $39 per barrel. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect strengthening bullish momentum, and the 100 SMA seems to have held as dynamic support. RSI is turning lower without even hitting the overbought zone, however, so a return in selling pressure might be in order. Stochastic also looks ready to top out and price could follow suit as it heads south. Crude oil is on better footing lately as traders are hopeful that the OPEC could extend its output cuts in order to keep the market stable. The OPEC meeting with Russia is coming up soon and an agreement to limit production for much longer could mean more gains for the commodity price. Keep in mind that the cartel pushed up the timeline for its meeting to discuss the future of the group’s current oil production cut plans which are set to expire at the end of June. Apart from that, a surprise draw in crude oil stockpiles also supported the idea of demand picking up. The American Petroleum Institute reported a small crude oil inventory draw of 483,000 barrels for the week ending May 29 versus analysts expectations of a build of 3.038 million barrels and the earlier increase of 8.731 million barrels.

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