WTI crude oil is still trending lower inside a falling channel on the 1-hour time frame and might be in for an even steeper slide. Price bounced off the mid-channel area of interest and is back to testing the bottom again.

A break below the lows around $59 per barrel could lead to a sharper decline for crude oil prices. On the other hand, another bounce could lead to a pullback to the higher Fib retracement levels.

The 38.2% level is still around the mid-channel area of interest at $60.67 per barrel then the 50% level is closer to $61 per barrel. The 61.8% Fib is near the channel resistance and the $61.50 per barrel minor psychological mark, as well as the 200 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is still above the 200 SMA to indicate that the path of least resistance is to the upside or that there’s a chance for more gains. Then again, the gap between the indicators is narrowing to reflect weakening bullish momentum and a potential bearish crossover.

Stochastic is still pointing higher to indicate the presence of bullish pressure while RSI also has some room to climb before reflecting exhaustion among buyers. Once the oscillators reach the overbought region, selling pressure could return.

Crude oil might be in for some gains if the EIA indeed reports a draw of 1.3 million barrels, enough to make up for the build of 1.3 million barrels in the earlier report. An even larger reduction could be bullish for the commodity while another build could spur losses.

Note that supply has been dampened on account of the temporary shutdowns among production facilities due to the winter storms. Meanwhile, expectations of an earlier return to normal business conditions on account of the vaccination programs could continue to keep risk-taking and commodity demand supported.