Crude oil prices extended declines but the price level near 37.67 is holding up the commodity for now.
A rebound off this level should be followed by a move higher. Therefore, watch for oil prices to test the 40.00 level and probably move higher.
In the event that prices form a lower high, then we expect a move back to the 37.67 level. This could potentially result in prices breaking down lower.
In such a scenario, oil prices could be setting up for a correction that is long overdue.
The lower price level near 34.42 will become the key downside target in the event of a correction.