WTI Price Analysis: Scope to go higher amid Saudi discussions over oil cut extension

• Oil has finished its corrective move as Saudi Arabia proposes an extension on oil cuts.
• Better-than-expected Caixin manufacturing PMI data has supported oil prices.
• WTI seeks to break the chart pattern of the ascending channel.

He West Texas Intermediate (WTI), futures on NYMEX, have bounced after concluding their corrective move to near $71.00 in the London session. The oil price is expected to recapture the intraday high of $71.60 as discussions of a further extension of oil production cuts have deepened.

Saudi Arabia’s energy ministry has announced it will extend its crude production cut for another month, Newswires reported.

Meanwhile, better-than-expected Caixin manufacturing PMI data has supported oil prices. Economic data came in at 50.5, above expectations of 50.2, but remained below the previous release of 50.9. It should be borne in mind that China is the world’s largest oil importer and that the good performance of the factories has improved the prospects for oil demand.

WTI is looking for a breakout of the rising channel chart pattern on the hourly scale where each pullback is seen as a buying opportunity for market participants. The recovery of oil prices will be strengthened after the break in the pattern.

The 50 period EMA provides support for oil bulls.

The Relative Strength Index (RSI) (14) has moved into the bullish range of 60.00-80.00, indicating that bullish momentum has been activated.

If the Asset breaks above the intraday high at $71.83, Oil bulls would take the Asset towards the June 8 high at $73.23 followed by crucial resistance around $75.00.

On the other hand, a move lower below the May 31 low at $67.12 would drag oil towards the $65.00 support followed by the final support at $64.31.

WTI hourly chart