WTI crude oil bounced off the top of its ascending channel resistance this week when API data showed a surprise build in stockpiles. This revived oversupply fears somewhat as rising US oil rig counts could lead to more inventory gains down the line.

Price could be on its way to test support at $47 per barrel from here. This lines up with an area of interest or former resistance visible on the 4-hour time frame and the 100 SMA dynamic support. Speaking of moving averages, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This means that the rally is more likely to resume than to reverse.

Also, the 100 SMA lines up with the bottom of the channel to add to its strength as a floor. A larger dip could still find support at the 200 SMA dynamic support. RSI is still pointing down to show that sellers are on top of their game and could keep pushing crude oil price down while stochastic is also heading lower. However, the latter is near the oversold region, which means that sellers could book profits and allow buyers to regain the upper hand soon.

The API reported an increase of 1.78 million barrels in stockpiles versus the projected draw of 2.8 million barrels. Analysts are pricing in expectations of a buildup in the data from the Energy Information Administration later this week. Keep in mind that Baker Hughes has been reporting consecutive weeks of gains in US oil rig counts as producers resumed drilling operations when prices picked up.

Markets now turn their attention to the next OPEC meeting as Saudi Arabia could push for stronger measures and encourage better compliance among member nations. Their latest report indicated that output hit a high of 33 million barrels per day for the year, keeping global glut fears in play. Analysts have remarked that oversupply could stay until next year.