WTI crude oil continues to consolidate inside its descending triangle pattern, bouncing off support at $65.60 per barrel and heading for the resistance next.

The top of the triangle is likely to keep gains in check, as suggested by technical indicators. The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside. The 200 SMA even lines up with the triangle top to add to its strength as a ceiling.

Stochastic is heading lower to show that sellers have the upper hand, and the oscillator has plenty of room to go before indicating oversold conditions. RSI also seems to be turning lower, but this indicator has some room to climb before reflecting exhaustion among buyers.

A break below the triangle bottom could set off a drop that’s the same size as the triangle pattern, which spans around $10. Similarly a break above the resistance could lead to a rally of the same height.

Crude oil has been under downside pressure for the most part of the month, as the OPEC agreed to boost production by 400K barrels per day from August to December. This could lead to a global glut since more economies are announcing and extending lockdown measures to curb the spread of the Delta variant.

The OPEC-JMMC have yet to release any recommendations on adjusting this output deal, and the lack of any changes might mean more downside for the commodity. Risk sentiment appears to be supported by stimulus measures from governments and central banks, though.

The upcoming Baker Hughes oil rig counts might still impact crude oil price action early in the next week, although any updates from the OPEC might carry more weight. Any indication that the cartel could budge on its production deal might keep the commodity supported.