Crude oil extends gains on supply concerns, testing key resistance levels

WTI crude oil continues its upward momentum for the sixth consecutive day, reaching a three-week high on Wednesday.

The latest rally was fueled by a sharper-than-expected decline in U.S. crude inventories (API report) and mounting concerns over potential supply shortages. The U.S. has threatened sanctions against those purchasing oil from Venezuela, with China being the top buyer, adding to market uncertainty.

Further pressure on supply comes from new U.S. sanctions on Iran’s oil sales, complicating the situation as China remains Iran’s largest crude customer.

However, OPEC+’s decision to increase output starting in May and positive signals from ongoing peace talks between the U.S., Russia, and Ukraine could temper bullish momentum and limit further price gains.

WTI is currently testing the key psychological resistance at $70, with additional barriers near $70.70 (Fibo 38.2% of the $79.35-$65.22 downtrend / 100DMA). Stronger resistance is expected at these levels, particularly as daily indicators show overbought conditions and mixed technical signals.

Fundamental drivers remain the primary influence on oil prices, with attention on U.S. tariffs and sanctions as key factors shaping the market.

A decisive break above the $70.00-$70.70 zone would reinforce bullish momentum and pave the way for further gains, while failure to hold above this area could signal a potential pullback, with confirmation needed on a drop below the $68.55-$68.00 support zone (broken Fibo level / converging 10/20DMA).

Res: 70.00; 70.70; 71.00; 71.34
Sup: 69.05; 68.55; 68.00; 67.79