WTI crude oil has been under weaker volatility lately as traders appear to be waiting for the next big catalyst. Price has formed higher highs and higher lows, moving inside a rising wedge pattern on its 1-hour time frame.

Price is currently testing support and could be due for a bounce back to the resistance. The moving averages are near the wedge support, adding to its strength as a floor. Also, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that support is more likely to hold than to break and that an upside break past the resistance is a possibility.

The wedge spans $49 to $52.50 so the resulting uptrend could last by the same amount. Of course a downside break is also possible and this could lead to a drop of around $3.50 in height.

Stochastic is already indicating oversold conditions, though, so sellers must be feeling exhausted. RSI, on the other hand, is simply treading sideways to indicate further consolidation.

Crude oil is supported by falling inventory levels as reported by the American Petroleum Institute. Gasoline inventories, according to the API, saw a huge draw of 5.753 million barrels for the week ending October 20, against a smaller expected draw of 2.3 million barrels. The report from the Energy Information Administration is still coming up but another significant decline could keep propping the commodity higher.

In addition, concerns about the Iran conflict are also lifting crude oil on expected disruptions. Expectations of an OPEC deal extension are still in play but are no longer dominating the headlines, so traders are still holding out for any confirmation.

In addition, traders are likely to keep close tabs on US export levels as this could also impact global supply. The release of US oil rig counts could influence these expectations as well.