• WTI crude futures eased below $80 per barrel on Friday but were on track to gain for the fifth consecutive week.
• Saudi Arabia and Russia’s voluntary output cuts, along with OPEC+’s readiness for further action, tightened crude supply, supporting prices.
• Chinese authorities’ efforts to boost the economy raised hopes for increased fuel consumption, bolstering demand outlook.
• Brent crude futures also eased below $84 per barrel but were set to gain for the fifth consecutive week.
• Tightening global supplies and improving Chinese demand contributed to Brent’s rally of more than 10% this month.
• Concerns over long-term demand were stoked by the US Federal Reserve and European Central Bank’s further interest rate hikes to tackle inflation.

Crude oil is currently trading around the upper value extreme of the Year’s developing value areas, potentially prompting sellers to open core short positions for a potential pullback towards the Year’s VWAP. However, the mentioned fundamental aspect supports the price.

Analyzing the previous volume profile, we can observe a balanced structure, and traders appear to be relying on the extreme to determine the current rotational scenarios.

(Click on image to enlarge)

The current lower dollar might act as a boosting factor, while being a net exporter could indicate selling interest. Additionally, the current positive volatility might signal selling interest around the upper extreme of the mentioned balanced profile structure. However, the median- to long-term volatility seems to be negative, which is supporting the price to move higher.

In conclusion, the market may encounter pressure around the upper extreme, potentially leading to a pullback. This pullback might be used by buyers to add to core long positions, particularly around areas of interest such as VWAP close levels.

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