Crude oil price hit $85 earlier on Wednesday as the US reopens its borders to vaccinated foreigners. At the same time, data from the American Petroleum Institute (API) showed a higher-than-expected draw in oil stockpiles.
The data comes a day after EIA’s STEO report indicated the probable decline in gasoline prices in coming months. Investors appear bullish on the forecast as it may stop the US from releasing crude oil from its Strategic Petroleum Reserve (SPR).
Crude oil price prediction
WTI futures have extended the previous gains as it continues on its bull run. After dropping to a one-month low of 78.28 in the past week, the benchmark for US oil has since risen by 7.71%.
Notably, crude oil price is 126.19% higher than it was in 2020 at a similar period. Besides, since the beginning of 2021, it has soared by 79.52%. At the time of writing, WTI futures were down by 0.15% at 84.38.
On a two-hour chart, it is trading above the 25 and 50-day exponential moving averages. This signals further gains in the ensuing sessions. Earlier in Wednesday’s session, it hit a high of 85, with an RSI of 72. While it has since pulled back, it is still in the overbought territory with an RSI of 71.
In the immediate term, I expect crude oil price to continue finding resistance at 85. It may pull back further to find support at 83.74 before reviving its rally. A further pullback may place the support along the 25-day EMA at 82.71. On the upside, a move past the resistance level of 85 will place the next target at 86.