WTI crude oil has been consolidating inside a descending triangle pattern, forming lower highs and finding support at the $56 per barrel level. Price has just bounced off support and is making its way up to the top of the triangle at $58 per barrel.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the rally is more likely to resume from here and make it up to the top of the formation.

However, the 100 SMA appears to be holding as a dynamic inflection point and keeping gains in check. Stochastic is hovering around overbought levels and looks ready to turn lower to indicate a return in selling pressure. RSI seems to have some room to climb, possibly keeping price on track towards testing the triangle resistance.

Crude oil has been able to benefit from risk appetite in the past few days, as well as the report that OPEC production fell in November. This signals that the cartel could keep its word of limiting output until the end of next year in compliance with their output deal and extension.

OPEC crude oil production declined by 133,500 barrels per day in November but supply remains elevated from rising US output. Still, according to Baker Hughes, oil rig counts fell by 4 to 747, which is its first drop in six weeks. This could keep a lid on production and inventories as reported by the API and EIA this week.

Meanwhile, the lack of strong tightening hints from majority of the central banks in their monetary policy decisions last week could keep business activity supported. This would lead to stronger demand for commodities, including energy products and crude oil.