WTI Price Analysis: Approaches $85.00 as OPEC+ aims to stabilize oil market

• Oil price extends recovery as hopes of further supply cuts offset China’s weak demand.
• Chinese firms struggle to raise the prices of goods at factory gates due to weak domestic demand and declining exports.
• WTI prices rebounded after discovering buying interest near the lower portion of the Rising Channel pattern.

West Texas Intermediate (WTI), futures on NYMEX, jump above the three-day high of $82.90 in the European session. Sheer strength in the oil price comes from OPEC+ commentary that the organization will take precautionary measures to stabilize the market.

Hopes of a supply cut by the oil cartel offset weak demand from China. Consumer Price Index (CPI) in China expanded by 0.2% last month against deflation while producer inflation deflated at a higher pace of 4.4% than expectations of 4.1%.

Firms struggle to raise prices of goods and services at factory gates due to weak domestic demand and declining exports. It is worth noting that China is the largest importer of oil in the world and weak demand in China impacts the oil price. Going forward, United States inflation data for July will remain in the spotlight.

WTI prices rebounded confidently after discovering stellar buying interest near the lower portion of the Rising Channel chart pattern formed on a four-hour scale. The asset climbs above the immediate resistance of $82.90 and is expected to deliver more gains ahead. Upward-sloping 50-period Exponential Moving Average (EMA) at $81.00 is consistently providing support to the oil bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is aiming to shift into the bullish range of 60.00-80.00. An occurrence of the same will trigger the upside momentum.

A decisive break above April 12 high at $83.40 would drive the asset toward a fresh eight-month high around $85.00, followed by a 16 November 2022 high at $86.90.

In an alternate scenario, a breakdown below August 3 low around $78.50 would drag the asset toward July 13 high at $77.17. A slippage below the latter would expose the oil price to July 17 low at $73.78.

WTI four-hour chart