WTI crude oil is moving inside a range as it bounces off support at the $50 per barrel level and resistance around $54 per barrel. Price is just coming off a test of support and might be due for a move back to the top.
The moving averages are oscillating to signal range-bound action, which means that the support might still hold and allow the commodity to bounce back to resistance. However, the moving averages could also hold as dynamic inflection points just close by.
In that case, WTI crude oil could attempt to break below support and fall by the same height as the rectangle formation. A move past the resistance, on the other hand, could form a double bottom and spur a rally that’s the same size as the reversal pattern.
RSI is on middle ground but slowly turning lower to signal a pickup in selling pressure. Stochastic is also pointing down so price might follow suit while sellers have the upper hand. Reaching oversold levels and turning higher could draw oil bulls back in.
News that the OPEC has delayed its decision on the output deal has weighed on prices as traders are already disappointed about the likely range of production curbs. Note that the cartel would likely keep this arrangement in place for just a few months, so market watchers have been expecting larger reductions in order to an immediate effect.
Nonetheless, Russia has expressed willingness to participate, which is a good factor and would likely lead the deal to materialize in the second set of meetings today. The lack of a decision, however, could weigh heavily on the commodity price as it already reels from slower demand on account of trade tensions. A larger than expected cut could still have a chance at boosting price in the short term.