Oil Price Debate

Recent talk of drastic oil price drops given recent price declines seem to me to be overly optimistic. These scenarios rely too heavily on a number of assumptions that are unlikely to occur, and the likelihood that all will occur together is even slighter still. Here is a chart for the past 2 years of oil prices:

Other than this past February/March, the only time the price dipped below the 240 day MA has been the past two Decembers. The rallies off these December lows were 116% and 89% of the previous Sept/Oct highs. Given these rallies, institutional investors would be more likely to play the historical tendencies than bet against them - buying into the new year and preventing the December slump from escalating.
The past 3 selling periods have topped off at 76% of the previous rally (the current downtrend is at 43%) meaning that even a large selloff wouldn't be likely to breach $65. The 240 day MA and the 76% guideline both point towards a target of $65 for the upcoming 4th quarter slump in oil prices. And that assumes there will not be another rally in prices for the rest of the year.

It does seem like we are moving towards a market where bad news will be net positive once the situation is resolved (upticks getting smaller while relief selloffs getting larger as optimism grows), although I do not see that resulting in any major movements downward over the longer term. China's oil imports are rising at 8% year-over-year with no signs of easing - I don't see how positive news regarding US stockpiles can overcome that 8%.