WTI crude oil could be in for a reversal from its uptrend, as price is forming a bearish divergence on its 4-hour chart. If so, crude oil could retreat to psychological support zones like $70 per barrel next.

Stochastic has formed lower highs while price is forming higher highs, reflecting exhaustion in bullish momentum. The oscillator has room to head south before reaching the oversold region, so price could follow suit.

Similarly, RSI is forming lower highs and heading down without reaching the overbought area, suggesting that sellers are eager to take over.

However, the 100 SMA is above the 200 SMA to signal that the path of least resistance is to the upside or that the climb is still likely to regain traction. The gap between the indicators is widening to reflect strengthening bullish momentum, and these moving averages might still hold as dynamic support on dips.

WTI crude oil is enjoying upside momentum, as the American Petroleum Institute and Energy Information Administration both reported larger than expected reductions in inventories. The EIA printed a draw of 7.6 million barrels, more than twice the projected drop of 3.6 million barrels to reflect stronger demand for the commodity.

Supply could also remain limited as the OPEC+ agreed to maintain its output deal, even as prices have already stabilized above the $70 per barrel mark. Risk appetite on the Fed’s downplaying of inflation and rate hike prospects also helped lift the commodity, along with other higher-yielding assets.

Still, any return in risk-off flows and potential profit-taking by next week at the end of the quarter could bring downside for crude oil. Keep in mind that other major central banks might be considering tightening monetary policy, so the prospect of higher borrowing costs could limit investor optimism and business demand for fuel.