WTI oil futures (March delivery) have been stuck in a prolonged downtrend since June, generating a fresh one year-low of 70.30 in December. Even though the commodity managed to recoup some losses and break above its 50-day simple moving average (SMA), its rebound seems to be running out of juice.
The momentum indicators currently suggest that near-term risks are tilted to the upside. Specifically, the MACD histogram is softening but remains above zero and its red signal line, while the RSI is flatlining above its 50-neutral mark.
Should the positive momentum strengthen, initial resistance could be met at the 2023 peak of 82.65. Piercing through that wall, the price could ascend towards the November high of 92.50 before the 97.65 barrier comes under examination. Further advances could then cease at 102.00, which acted both as support and resistance in June.
To the downside, if sellers re-emerge and push the price lower, the recent support of 78.30 could act as the first line of defense. Sliding beneath that floor, the bears could aim for the September low of 76.25 before the 72.50 hurdle comes under examination. Failing to halt there, the price could challenge the one-year low of 70.30.
In brief, WTI oil futures appear unable to extend their rebound as they have been rejected twice by the 2023 peak of 82.65. Therefore, the commodity is likely to enter a consolidation phase, trading sideways between its recent strong resistance zone and the 50-day SMA.