WTI crude oil is in retracement mode but appears to be finding support at the area of interest that lines up with the 61.8% Fib level.

This also happens to coincide with a former resistance level that could add to its strength as support, along with the 200 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. The gap between the indicators is narrowing, however, reflecting weakening bullish momentum.

Stochastic is reflecting oversold conditions, and turning higher would mean that buyers are returning. RSI also looks ready to bottom out, possibly leading crude oil to rally back up to the swing high at $70.65 per barrel from here.

Crude oil took hits after the US NFP revealed a much weaker than expected increase in hiring for August. This suggests that the recovery in the US economy is not gaining much traction as initially anticipated, likely weighing on demand for fuel and commodities.

Then again, this could confirm that the Fed would be in no rush to withdraw stimulus, allowing businesses and consumers to benefit from low borrowing costs for much longer.

However, the OPEC decision to increase production by 400K barrels per day starting last month until the end of the year could continue keeping a lid on crude oil prices in the coming months. After all, global demand is slated to stay subdued as most economies grapple with the Delta variant spread and resulting lockdowns.

The upcoming inventory reports from the API and EIA should shed more light on supply and demand conditions in the US, likely providing mid-week volatility for the commodity.