WTI crude oil broke below support at the $79 per barrel mark and has since pulled up to retest this level. The Fib tool shows that this lines up with the 61.8% retracement level.
If this is enough to keep gains in check, crude oil could resume the slide to the swing low at $74.80 per barrel or lower. The 100 SMA crossed below the 200 SMA to indicate that the path of least resistance is to the downside. In other words, resistance levels are more likely to hold than to break.
RSI has some room to climb before reflecting overbought conditions, so buyers might still be in control for now. However, the oscillator also seems to be topping out and ready to head back down, so crude oil price might follow suit.
Stochastic is also indicating overbought conditions or exhaustion among buyers, so turning lower would confirm that sellers are taking over.
The EIA reported a surprise build of 1 million barrels in stockpiles in the latest reporting week, contrary to expectations of a 1.7 million barrel reduction. This suggests that demand might be slowing or that production is ramping up.
This is in line with the API release that also printed a surprise build, following the release of SPR into the global market. This keeps supply elevated, even as some countries are still recovering from the energy crunch a few weeks back.
Volatility could turn lower in the coming days, as most traders will be off on Thanksgiving holidays until early next week. This might be enough to keep crude oil in consolidation mode or to allow its downtrend to resume.
Keep in mind that other countries like Japan and China are about to release oil reserves into the global market as well, which the IEA and OPEC warned might lead to a glut.