WTI Crude, Brent Crude Forecast: WTI rally on pause at key resistance level

Trading some ~12.80% higher than 24-month lows made courtesy of Trump’s ‘Liberation Day’, WTI crude and Brent crude currently trade at ~$63.90 and ~$66.01, respectively.

1. Upside for crude oil is likely to remain limited while OPEC+ maintains a trajectory of production hikes, seemingly aiming for more market share and to apply pressure to North American production
2. According to yesterday’s report, U.S. crude oil inventories were shown to be falling faster than expected, down by around 1%. Although this would typically be bullish for pricing, momentum was tempered by substantial gains in gasoline and distillate inventories
3. Questions on global demand remain, with global manufacturing PMIs, especially out of China, remaining somewhat mixed
4. Disrupting 7% of oil production according to Reuters, wildfires in Alberta, Canada, have supported oil pricing in the short term, raising questions on supply

• WTI crude is trading higher in today’s session, with the 20 and 50-period SMAs offering support. If price can maintain highs, bulls will aim towards the 100-period SMA, which has proven an area of significant resistance in recent memory.
  
• In the short term, $62.63 is offered as the nearest level of support, while resistance lies at $63.60, intersecting with the trendline. The next few days of price action are particularly important for short-term oil performance, should price breakdown below the trendline or break above
  
• According to the 14-period RSI, recent bullish momentum has grounds for a further leg up, still trading well below oversold levels

• Unlike its American counterpart, Brent crude still looks to surpass the 50-period SMA, with the next few days of price action being critical for establishing support
  
• In the short term, we can expect $64.20 to be the next level of resistance, with the same level being used as a period of support mid-April. Otherwise, if prices fall to $64.83, at least some buyers will return to the market
  
• Similarly to WTI, and owing to sideways movement through much of May, the 14-period ADX rates the last two weeks as ‘weak or absent’ in trend strength. Price currently faces a ‘make-or-break’ scenario on approach to the trendline