WTI crude oil has broken below a short-term ascending trend line and could be due for a test of the larger one soon. This would be around the $54 per barrel level, but the moving averages are holding as near-term support for the time being.
The 100 SMA is also above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse, but bulls might be waiting at much lower levels. For now, the 200 SMA is holding as dynamic support and might be enough to keep losses in check.
Stochastic is also indicating oversold conditions, which suggests that sellers are exhausted and could let buyers take over. RSI is also dipping close to oversold territory to signal bearish exhaustion.
Crude oil inventories saw another larger than expected decline, according to both the Energy Information Administration and the American Petroleum Institute. However, there has been a buildup in other types of energy commodities, which has prevented crude oil from rebounding.
The reopening of the Keystone Pipeline has also kept traders mindful of a potential buildup down the line as more barrels of oil will resume flowing from Canada to refineries in the US. To top it off, weaker risk appetite over the past few days on Brexit risks and other geopolitical uncertainties have kept a lid on crude oil.
Profit-taking after the OPEC meeting also seems to be in play until now, even as the cartel actually extended their agreement until the end of 2018. Many are still wary that a potential review in June could lead to the deal being called off altogether if the market is overheating then.
Looking ahead, data from Baker Hughes on oil rig counts could determine whether crude oil is in for a deeper pullback or could be ready to resume its rally.