WTI crude oil is still retreating from its climb, as it fell through the mid-channel area of interest and is setting its sights on the bottom. This happens to line up with the $60 per barrel major psychological mark where buyers are waiting.

Price is finding support at the 100 SMA dynamic inflection point, but there could be some bearish pressure in play since this moving average is below the 200 SMA. Then again, the gap between the indicators is narrowing to signal slowing bearish pressure and a potential bullish crossover.

Stochastic already reached the oversold region to signal exhaustion among sellers, and turning higher would mean that buyers are returning. In that case, crude oil could bounce back up to the middle of the channel at $62 per barrel or the channel top at $64 per barrel.

RSI has a bit more room to head lower before indicating oversold conditions, so a test of the channel support is still possible.

The EIA crude oil inventories report revealed a surprise build of 0.6 million barrels instead of the estimated 3.7 million barrel draw, suggesting that demand remains weak or that supply levels are elevated.

Keep in mind that the OPEC+ agreed to gradually increase output now that prices have stabilized, so concerns of a supply glut might be in play. If demand is unable to keep up, crude oil could keep sliding even below the channel bottom. Once that happens, a reversal from the uptrend could follow.

However, the reopening of several economies thanks to the success of vaccination efforts and stimulus measures could keep demand for fuel and energy commodities supported. This is also good for business and consumer sentiment, which then lifts investors’ appetite for higher yielding assets like crude oil.