The simplified take on the oil market now is that the bulls have gotten less bullish amid the recent price action but are staying firm that the fundamental outlook for prices is that it favours a move higher, despite what the data might say. But as much as the optimism is retained, the technicals are something that should not be ignored either.

The drop in oil back below $95 and more crucially its 200-day moving average (blue line) has been a major blow to the bullish sentiment that has prevailed since the end of last year.

Right now, the critical level to watch is the $88 mark as buyers are hanging on in there close to the 61.8 Fib retracement level at $88.04. That remains the key support level to eye on the daily chart. If buyers can convince of a push back above $95 or the 200-day moving average, then there is scope for a further rebound towards $100 next. However, break below $88 and we could see a quick fall back towards $80 next.