WTI crude oil is extending its slide, with price now trading at $86.73 per barrel and trading inside a descending wedge formation. The suggests that sellers are firmly in control, and a measured move lower could follow if the pattern plays out in full.
The descending wedge spans from the highs near $101.00 down toward current levels, with both the upper and lower trend lines converging to the downside. While wedge patterns can sometimes resolve to the upside, the sustained break below the lower support line tilts the near-term outlook bearish.
The pattern’s measured target points toward the $83.00–$84.00 area, which could come into play if selling pressure intensifies.
Price is currently trading beneath both the 100 SMA and 200 SMA, and the two moving averages have crossed into a bearish alignment with the 100 SMA sitting below the 200 SMA. This confirms that the path of least resistance is to the downside. The moving averages are now clustered around the $91.00–$92.00 region, which could act as dynamic resistance on any attempted bounces.
Stochastic has made a sharp move lower after recently retreating from the overbought zone, and the oscillator still has room to slide before reaching oversold levels. This suggests that bearish momentum has room to run before buyers step back in.
RSI is similarly heading south in the mid-range, with no signs of a reversal just yet, keeping sellers in the driver’s seat for now.
On the fundamental side, reports of progress toward a US-Iran peace deal could weigh heavily on crude prices, as a resolution would ease supply concerns and potentially flood markets with additional Iranian barrels. If a deal is confirmed, the $83.00 support zone could be the next line in the sand.
On the other hand, talks once again collapsing could spur another gap higher for crude oil on Monday as the war premium could lead to more gains for the energy commodity.
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