WTI crude oil is consolidating inside a rising wedge formation on its 1-hour time frame. Price is in a larger symmetrical triangle on its 4-hour chart and is currently testing the top of that formation.

In that case, a downside break from this wedge could lead to a drop to the longer-term triangle support. An upside break on the other hand could lead to gains of the same height as the wedge pattern. The moving averages have been oscillating to reflect consolidation.

Stochastic appears to be pulling up from the oversold region to reflect a pickup in buying pressure. RSI, on the other hand, is pointing down but barely giving strong directional clues.

The lack of major market catalysts for the oil market has kept the commodity moving sideways for a while. Traders are likely waiting to see how the US tax cuts could influence crude oil demand and supply, and if the OPEC has further actions to take.

Recall that the cartel agreed to extend their output deal until the end of the year but might be due for a review in June. So far, rising US oil rig counts and production have kept a lid on price gains, so there’s no immediate concern of the market overheating just yet.

Still, the strong pickup in risk-taking has proven positive for most commodities so there could be room for upside for crude oil. The API and EIA have reported reductions in inventories, further easing oversupply concerns and assuring that the market will rebalance soon.