WTI crude oil appears to be enjoying a return in bearish pressure as price just broke below its short-term rising trend line. Price has since pulled up for a retest and it looks like the broken support is keeping gains in check.

The 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside, which means that there’s still a chance for the uptrend to resume. However, the gap between the moving averages is narrowing to reflect weakening upside momentum. A downward crossover could draw sellers back in and lead to a drop to the latest lows below $51 per barrel.

Stochastic is turning lower from overbought levels to reflect a return in selling pressure as well. A bit of divergence can be seen as price formed lower highs while stochastic had higher highs since the middle of October.

RSI has room to climb so bullish pressure could stay in play for a while until the oscillator hits overbought levels and turns lower. Stronger selling pressure could lead to a test or break of the $50 per barrel major psychological level.

WTI crude oil enjoyed a strong bounce after the OPEC reignited output deal extension expectations. This generated a rally similar to earlier in the week when sources shared that the cartel could go for a nine-month extension of their production agreement, effectively keeping a lid on output until the end of 2018.

Meanwhile, the number of US oil rigs drilling for new production fell by seven to 736 in the week to October 20, the lowest level since June, according to Baker Hughes. Traders are likely to keep close tabs on data from the American Petroleum Institute and the Energy Information Administration throughout the week.

Apart from that, updates from Iran on the fighting between government forces and Kurdish militant groups could also impact the outlook for oil supply in the area. Rising demand from other nations like China and India could also play a role in pushing crude oil around.