WTI crude oil is moving inside an ascending channel pattern and appears to have bounced off the mid-channel area of interest. This lines up with the 38.2% Fibonacci retracement level on the latest swing high and low, which might be enough to keep losses in check.

This retracement level is also close to the 200 SMA dynamic support. The 100 SMA is above this longer-term moving average so the path of least resistance is to the upside, which means that the uptrend is more likely to continue than to reverse. In that case, WTI crude oil could make its way back to the channel resistance or swing highs near $50 per barrel from here.

However, stochastic is pointing down to signal that bearish pressure is present. If sellers stay on top of the game, price could make a deeper correction to the 61.8% Fibonacci retracement level closer to the channel support and area of interest at $47 per barrel. RSI appears to be on the move up, though, so WTI crude oil might follow suit.

Stronger bullish momentum could spur a break past $50 per barrel and mark the start of a longer-term climb. After all, this psychological level also lines up with the top of a longer-term descending channel. On the other hand, a strong return in selling pressure could trigger a break below the channel support and a longer-term selloff to $44 per barrel.

The EIA report showed a drop of 1.5 million barrels in stockpiles, lower than the estimated and previous draws but a reduction that was able to ease oversupply concerns nonetheless. Market participants are expecting more draws as the US imposes sanctions on Venezuela’s oil imports, which means that they’d have to use their own output from local drillers.

Traders will now turn their attention to the OPEC meeting next as Saudi Arabia is expected to urge for better compliance among member nations. They are also reportedly considering lifting exemptions on Nigeria and Libya, but this may be easier said than done.