For nearly a year, the US has had ample supply of oil. Excess supply = lower price. And as NDD has noted this week, domestic oil production is up, fuel efficiency is up, the sale of hybrids is picking up, US demand is stable and the use of mass transit is increasing (see here and here). Put another way, there are ample events leading to downward pressure on prices.
Also consider that the EU is in the middle of a recession and US growth is not as strong as it could be. Both of these events are lowering demand, although they are both more cyclical.
Since the beginning of March, oil prices have rallied from a little over 90 to just over 97 this week. However, prices have dropped sharply over the last two trading sessions. Prices have moved through the lower Fib fan, making the 200 day EMA the likely price target. Finally, notice the volume spikes over the last few days, indicating traders are shorting positions.
Finally, I've added two weekly chart. The top chart shows that for the last two years, prices have been trading between the 38.2% and 61.8% Fib level of the 2008-2009 sell-off. The second chart shows that prices have been consolidating in a triangle pattern on declining volume.
