The recent story in the crude oil market is a bit complicated. On Wednesday during the Asian session, the Trump administration's pressure measures on Venezuela temporarily gave oil prices a breather, bouncing off last year's lows. But honestly, this rebound seems fleeting— the shadow of global oversupply remains, from the Middle East to the US, and there's a pervasive sense of fatigue in the market.

The fundamentals don't look very promising. The International Energy Agency predicts this year will see the most severe supply surplus since the pandemic, which is not good news. OPEC+ is accelerating the release of idle capacity, and other oil-producing countries are also increasing output, resulting in downward pressure on oil prices throughout the year. Additionally, traders are pondering the possibility of peace negotiations in Ukraine—if there is progress, restrictions on Russian oil exports might be relaxed, which would add more supply to the market.

From a technical perspective, WTI crude oil is having an even tougher time. The price is hovering around $56.45, having broken through multiple support levels. After rebounding from the recent low of $54.87, it is now testing resistance zones, and it appears that selling pressure is mounting. The key point is that the price is below the downtrend line, and the 100-day moving average has crossed below the 200-day moving average, signaling that the downward pressure still exists.

The Fibonacci retracement between the high of $57.88 and the low of $54.87 provides some reference. The 38.2% retracement level is at $56.10, and the 50% retracement is near $56.44—these are the levels that the bulls need to defend now. If the correction deepens, it could test the 61.8% retracement level at $56.78.