WTI crude oil resumed the slide to the Fib extension levels previously marked after testing the short-term channel resistance. Price is now back to the bottom of the channel and might be due for yet another correction to the top.

Applying the Fibonacci retracement tool shows that the 61.8% level is closest to the descending channel resistance around $68.50-69 per barrel. This is also near the dynamic inflection points at the moving averages.

On the subject of moving averages, the indicators still seem to be oscillating to reflect current consolidation conditions. However, the 100 SMA also seems to be making a bearish crossover to confirm that the path of least resistance is to the downside. In other words, the downtrend is more likely to persist than to reverse.

RSI is still pulling up after reaching oversold territory, though, so there may still be a quick return in buying pressure just enough to get the retracement going. Stochastic is also heading higher so crude oil could follow suit until the oscillators indicate overbought conditions. Stronger selling pressure could even lead to a break below the lows at $66 per barrel and a steeper drop for the commodity.

Crude oil took hits on news that China will be matching the latest set of tariffs to be imposed by the US on August 23. The list of their commodities to target includes crude oil, which could leave plenty of oversupply in the US and the global market. To top it off, risk-off moves on escalating tensions and another round of uncertainty for businesses also weighed on crude oil.

It didn’t help that the Energy Information Administration reported a smaller than expected draw in stockpiles, keeping supply gut concerns present. The Baker Hughes oil rig count report is due next and an increase could drag the commodity further down.