West Texas Intermediate (WTI) crude has breached through $104 per barrel on the back of positive data out of the United States and forgetting about the four million barrel increase in inventories, according to Wednesday’s Energy Information Administration (EIA) data.
The Reuters/University of Michigan prelim consumer sentiment increased to 82.6, surpassing analyst expectations of 81.2 and last month’s upward revision of 80. “As the economy grows, oil demand will grow,” said Tom Finlon, director of Energy Analytics Group.
There was increased demand for gasoline in April, which could provide a boot for WTI, too. “The consumer sentiment number seems to suggest that the strong gasoline demand that we’ve seen may not be a fluke,” according to Phil Flynn, senior market analyst at Price Futures Group.
The daily chart of crude futures looks like momentum could pause slightly. The ADX is edging higher, but the + DMI is beginning to lag price action. The RSI, at 65.5, is at a level that has acted as resistance previous. A push through can add some additional gains, but price action would then hit resistance – and a double-top – at $104.85.
There would need to be a catalyst for the next leg up, and it could be unlikely to reach the next major resistance level at $106.17 without one. Support lies at $103.55, $103, and $102.11.