WTI crude oil is testing the descending trend line on its 4-hour time frame and might be due for a continuation of the downtrend. If so, price could aim for the downside targets marked by the Fib extension tool.

The 38.2% level is at $66.11 per barrel, then the 50% level is near the $64 per barrel mark. Stronger selling pressure could take crude oil down to the 61.8% level near $62 per barrel or the 76.4% extension at $59.42 per barrel. The full extension is at $55.28 per barrel.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is likely to resume. The 100 SMA dynamic inflection point also lines up with the trend line to add to its strength as a ceiling, and the gap between the indicators is widening to reflect strengthening selling pressure.

RSI looks ready to head lower without reaching the overbought zone, signaling that buyers could be exhausted and sellers are eager to take over. Stochastic is already indicating overbought conditions and is starting to head down to confirm a return in selling pressure.

The Department of Energy is due to print its crude oil inventories report today and could show a draw of 1.5 million barrels. This follows an earlier reduction of 0.9 million barrels, suggesting a pickup in demand.

Take note, however, that the US released oil reserves into the global market so supply could be elevated. Also, demand probably took a hit in the earlier week when news of the Omicron variant broke out.

With that, a surprise build or a smaller than expected draw in stockpiles might mean more downside for crude oil. On the other hand, a larger reduction could signal that demand remains supported, likely leading to stronger gains for the commodity.