WTI crude oil is moving in a downtrend and is currently testing the bottom of the descending channel visible on its 4-hour chart. A bounce off this level could lead to a pullback to the resistance at $48 per barrel.

The 100 SMA is above the longer-term 200 SMA for now but a downward crossover seems imminent. In that case, more bears could push WTI crude oil down from here. These moving averages are also around the top of the channel, adding to its strength as resistance.

Stochastic is on the move down to show that selling pressure is in play but also seems to be pulling up from the oversold region to signal a potential return in bullish momentum. RSI also appears to be turning higher so WTI crude oil might follow suit.

Hurricane Harvey is being pinpointed for the recent slide in crude oil as the shutdown of several refineries along the US Gulf Coast likely led to an oversupply of the commodity waiting to be processed. The tropical storm is still in the area so the extreme weather conditions could continue to dampen activity in the oil industry.

At the same time, the rise in geopolitical tensions following North Korea’s missile launch across Japan has led to a selloff among commodities. If these tensions escalate, crude oil could keep selling off along with global stocks as traders move their funds to safe-haven holdings.

Looking ahead, inventory data from the American Petroleum Institute and the Energy Information Administration could also have a large impact on crude oil trends. A large buildup in stockpiles could lead to more losses, possibly spurring a break below the channel support at $46 per barrel and leading to a steeper selloff. On the other hand, another weekly decline could ease global glut forecasts and lead to a quick recovery for the commodity.