In recent trading sessions, there was an increase in volatility for this commodity due to the EIA's crude oil stocks showing a greater rise and rumours that OPEC is mulling more production cutbacks.
Despite exceeding the consensus estimate of 3.1 million barrels, stockpiles increased by 4.2 million barrels, which was less than the 8.4 million barrel increase in private inventories reported by the API.
Even if this may still be a sign of declining oil consumption, news that the oil cartel intends to prolong its output agreement for a few more months helped to limit losses. Remember that until Q1 2024, OPEC decided in November to reduce output by 2.2 million barrels per day.
The hourly chart shows that the price of crude oil is still moving inside its upward trend channel, retreating from resistance and testing the 38.2% Fibonacci retracement line at R1 ($79.17 per barrel).
A more significant correction may approach the pivot point level of $77.22 per barrel or the 50% Fib that matches the dynamic support at the moving averages.
The price of commodities could continue rising to the swing high of $79.60 per barrel, which is just little less than R2 ($79.79 per barrel), if any of these continue to hold as support. The channel bottom that is exactly in line with the $77 per barrel significant psychological threshold may be the tipping point for a bullish pullback.
If this is broken, there might be a reversal from the short-term upswing, which could push crude oil down below S1 ($75.63 per barrel) in the following few days.
The oscillator still has some room to fall before indicating oversold circumstances, but stochastic already appears to be pointing to a continuation of the rise.
