WTI crude oil has formed lower highs and found support around $89 per barrel to create a descending triangle on its hourly chart. Price is testing the triangle support and might be considering a break lower.

If that happens, crude oil could tumble by the same height as the formation, which spans around $4-5. The 100 SMA just crossed below the 200 SMA to add confirmation that support is more likely to break than to hold, and price is moving below both indicators so these could hold as dynamic resistance near the triangle top.

Stochastic is pointing down to show that selling pressure is in play, and the oscillator has a bit of room to drop before reflecting oversold conditions or exhaustion. RSI is also on the move down, so crude oil price could follow suit while bearish pressure is present.

If support holds, another bounce to the triangle top near $90 per barrel could follow. A break above this could spur a rally that’s the same height as the chart pattern.

Crude oil would likely take cues from inventory figures from the API and EIA later this week, as well as any OPEC-related headlines. Rumors that the cartel is planning on curbing output led to a strong rally in the commodity price, as well as reports that Russia might ban energy exports.

A draw in stockpiles could also contribute to upside pressures on crude oil since this would confirm that demand remains supported despite recession fears. A build, on the other hand, might indicate that consumption is slowing as businesses and consumers deal with higher borrowing costs.

The US core PCE price index might also be a market-mover for commodities later in the week, as indications of stubborn inflation could spur hopes for another 0.25% Fed hike before the year ends.