WTI crude oil is trending lower on its 1-hour chart as price is finding some support at the $57.25 per barrel mark. This could set off a quick pullback to nearby resistance levels and the descending trend line on the short-term chart.

The 50% Fib lines up with this falling resistance level near $60 per barrel. If it holds, crude oil could slide back to the swing low or lower.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. The gap between the moving averages is widening to reflect strengthening selling pressure.

However, stochastic has been indicating oversold conditions for quite some time, and turning higher would mean that buyers could take over soon. A break past the trend line and 61.8% Fib around $60.20 per barrel could signal that buyers are back in control.

RSI is also pulling up after recently reaching the oversold area to signal exhaustion among sellers, so a pickup in bullish momentum might follow.

Crude oil could take cues from the inventory data to be released by the Department of Energy. Analysts expect to see a build of 1.4 million barrels, lower than the earlier increase of 2.4 million barrels. If that’s the case, it would reflect a pickup in demand, although supply is likely to stay elevated.

The American Petroleum Institute reported a build of 2.927 million barrels for the week ending March 19, slightly higher than the projected increase of 2.720 million barrels. This hints that the government report might also post an upside surprise.

Note that several cities have imposed another set of lockdown restrictions to curb the spread of the mutated strains of the COVID-19 virus, leading to weaker business and consumer activity down the line. This could be enough to weigh on demand for fuel and commodities, as well as investors’ appetite for risk.