WTI crude oil is on the bull, with price rallying above the $70.00 level. Buyers have come out of the woodwork since Sunday’s electronic open, bidding September WTI futures higher by more than a $1.00 per barrel. The recent strength in WTI crude has been significant. It appears that the intermediate-term correction of early July is over and price is poised to test yearly highs.

From a seasonal perspective, crude oil is in primetime for buyers. However, the Summer months are soon to pass. With inventories expected to build and demand to drop, one is inclined to believe that the top of this market for 2018 is very nearly in.

WTI Crude Oil Technicals

Last Friday’s release of the Baker-Hughes Rig Count gave traders an abundance of food for thought. As expected, the count reported a gain of three North American rigs to 861. With production ramping up, are we in line for a build in inventories this week?

Here are two support and resistance levels to keep an eye on for the remainder of the session:

• Resistance(1): Daily SMA, $70.20
• Support(1): Bollinger MP, $68.90

Overview: The daily chart is shaping up bullish. Price has slammed into topside resistance at the Daily SMA and is positioned to test this level again as the session wears on. In the event we see continued consolidation between the Daily SMA and Bollinger MP, a mid-week breakout on the inventories reports is probable.

Yearly highs have been established at $72.98 for September WTI futures. If we see buyers step in above $70.50, then this level will be tested in short order.