WTI crude oil recently broke below a short-term rising trend line to signal a reversal in the cards. Price is now forming a small descending channel to confirm that bears are taking control

Price appears to have completed its pullback of the broken trend line but might be due for another correction soon. The top of the small channel lines up with the 100 SMA dynamic inflection point, which might hold as resistance from here.

However, the 100 SMA is still above the longer-term 200 SMA to suggest that the path of least resistance is to the upside. In other words, there’s still a chance for the uptrend to resume from here. The 200 SMA is holding as dynamic support at the bottom of the small channel as well.

Then again, the gap between the moving averages is narrowing to signal weakening bullish momentum. If this follows through with a downward crossover, stronger selling pressure could come into play and sustain the drop.

RSI is pointing up after reaching oversold levels, though, so bullish pressure could still return. Stochastic is already moving north so crude oil price might follow suit.

Tensions between the US and Iran are heating up as the national guard of the latter threatened to halt crude oil flow from one of the major hubs if the former continues to urge its allies to stop importing Iranian oil.

Meanwhile, Trump has also called upon the OPEC to do more in order to keep a lid on crude oil price gains. The latest EIA report showed that US inventories saw a buildup in stockpiles, fueling oversupply concerns once more and lead to a dip in the commodity price.

Looking ahead, the Baker Hughes oil rig counts could act as one more catalyst for crude oil price action before the trading week comes to a close. Trade war jitters could also impact crude oil movement to some extent, but this particular commodity has shown resilience and moved to the beat of its own drum recently.