WTI crude oil recently underwent a sharp selloff on fears of lower demand in the near-term. Price found support near $58 per barrel and could be due for a pullback to nearby resistance levels.

The 61.8% Fib at $62.25 per barrel is near a falling trend line connecting the highs since last week. A shallow pullback could already find sellers at the 38.2% Fib at $60.56 per barrel or the 50% level at $61.40 per barrel. If any of these hold as a ceiling, crude oil could fall back to the swing low or lower.

Technical indicators are giving mixed signals. The 100 SMA just crossed below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse.

However, stochastic is already turning higher after indicating oversold conditions, so bullish pressure is returning. RSI is also heading up, so price could follow suit while buying pressure is present. Both oscillators have plenty of room to climb before indicating exhaustion among buyers, so the correction could keep going.

Analysts say that crude oil is on weaker footing on account mostly of the pandemic situation in Europe, with their shaky vaccination rollout and the reimposed lockdown measures in Germany and France. This could mean another huge dent in demand for fuel and commodities, as business and consumer activity would likely take hits once more.

Earlier this week, the smaller than expected build in stockpiles as reported by the Department of Energy barely made a bullish impact on crude oil. Inventories rose by 2.4 million barrels versus the projected increase of 2.8 million barrels, reflecting slightly better demand or lower output.

Note, however, that the OPEC+ agreed to extend their output deal in order to curb supply glut fears and keep crude oil prices stable.