WTI crude oil is trending lower on its hourly chart after undergoing a sharp breakdown over the weekend. Price is in the middle of a pullback to its short-term trend line.

This lines up with the 38.2% Fib level around $67.70 per barrel, which might be enough to keep gains in check. If so, crude oil could resume the slide to the swing low at $64.40 per barrel or lower. A larger correction could reach the 61.8% Fib at $69.76 per barrel.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The gap between the indicators is widening to reflect strengthening bearish pressure.

However, RSI is still heading up, so price could follow suit while bullish momentum is in play. Sellers could return once the oscillator reaches the overbought region to signal exhaustion among bulls. Stochastic is closing in on the overbought area to suggest that buyers could use a break and let sellers take over soon.

Crude oil is on weaker footing, as the emergence of a new COVID-19 variant called Omicron prompted another set of travel restrictions among developed economies. This could mean more downside for fuel and energy commodities in the near-term, unless vaccines show resilience to the variant.

Furthermore, risk-taking is being bogged down by the prospect of lockdown measures being imposed again, likely limiting business and consumer activity just as some economies have started to reopen.

Also keep in mind that the release of crude oil reserves by the US and China might backfire since demand could take another huge hit in the coming months. This oversupply could keep global glut concerns in play, likely dragging the commodity price further south.