WTI crude oil is still stuck in consolidation as price tests the top of the ascending triangle on the 1-hour time frame. A bounce off this area could set off another test of support around $61 per barrel.

The 100 SMA is above the 200 SMA to suggest that support is more likely to hold than to break. Price is trading above both moving averages as additional confirmation of bullish pressure, indicating that these are likely to hold as dynamic support levels on dips.

Stochastic is already indicating overbought conditions or exhaustion among buyers, and turning lower would mean that sellers are taking over. RSI is also heading south without reaching the overbought zone, indicating that bears are eager to regain the upper hand.

A break past the triangle top could set off a climb that’s at least the same height as the chart formation, which spans $58 per barrel to around $61.50 per barrel. Similarly a move below support could lead to a selloff of the same size.

Crude oil saw a smaller than expected draw in stockpiles in the latest report from the EIA, indicating possibly weaker demand conditions. Inventories were reduced by 0.9 million barrels instead of the estimated drop of 1.3 million barrels.

Another draw this week could still be enough to keep the commodity supported, but a huge build could trigger a downside triangle break. After all, this would signal weak demand among businesses and possible oversupply concerns.

Keep in mind, though, that more businesses are resuming normal operations now that the vaccination programs are being rolled out and stimulus efforts are also providing some support. This could pave the way for an earlier economic rebound than expected, which would then be positive for investor sentiment and appetite for risk.