WTI Crude Oil Bulls Ride China’s Economic Rebound Wave

Following higher-than-expected Purchasing Managers Index (PMI) reports from China, commodities, including WTI Crude Oil Futures (NYMEX: CL), picked up steam as bulls traded on the top oil importer’s economic rebound.  

China’s manufacturing activity picked up at the fastest pace in over a decade, signalling a robust economic rebound from lockdown restrictions. Upside gains were capped following a tenth consecutive week of inventory build. The Energy Information Administration reported that crude oil inventories are now 480.2 million barrels, the highest level since May 2021.  


WTI crude oil futures are trending upwards, with support and resistance established at the $75.06 and $77.77 per barrel (BLL) levels, respectively. Following a rejection of resistance, price retraced to the 61.80% ($76.09 BLL level) Fibonacci Retracement Golden Ratio before bulls entered the market and nudged the price higher.  

With price consolidating sideways at resistance, bulls and bears are battling for supremacy. A breakout above the $77.77 BLL level on high volumes could signal bullish momentum building up to take the price higher. The next level of interest for a bull case will be the $78.85 BLL level.  

If bears view the resistance zone as a lucrative supply zone, a reversal will likely be validated with a breakout below the $77.44 BLL level on high volume. Bears will look to the $76.09 BLL level with interest if they take control of the commodity.  


With inventory levels building up amid a rebounding Chinese economy, upside price action may be limited until the supply side subsides to fit in with the potential of growing demand. The $77.81 BLL level will be pivotal as traders currently view the level as a premium price.  

Sources: Reuters, Energy Information Administration, TradingView