WTI crude oil is testing the resistance at the $66.60 per barrel mark and could be due to retreat to the nearby support levels. The closest one might be at the area of interest around $64 per barrel.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is still more likely to hold than to break. Price is also above both moving averages, so these could hold as dynamic inflection p0ints on dips.

Stochastic has been indicating overbought conditions for quite some time and looks ready to turn lower to signal a return in selling pressure. RSI is also heading south without reaching the overbought zone, suggesting that sellers are eager to take over.

WTI crude oil could take cues from the inventory data from the Energy Information Administration, which could report a draw of 1 million barrels in stockpiles.

A larger than expected reduction could mean some gains for the commodity as this would reflect stronger demand. On the other hand, a small drop in inventories or a surprise build would suggest that purchases are still weak, likely resulting to losses for the commodity.

The American Petroleum Institute just reported a a draw in crude oil inventories of 439,000 barrels for the week ending May 21 versus estimates of a draw of 1.05 million barrels.

The upcoming release of US core PCE price index could also bring big moves for crude oil as it would impact Fed policy bias and therefore overall market sentiment. Stronger than expected inflationary pressures would underscore the central bank’s taper plans, which might weigh on overall risk appetite.

On the other hand, weaker inflationary pressures could ease fears of higher borrowing costs, which could be bullish for commodities in the near-term.