WTI crude oil could be in for a continuation of its slide, as price closes in on the top of the descending channel. Technical indicators confirm that sellers could return right here.

In that case, crude oil could fall back to the channel bottom around $63 per barrel or the mid-channel area of interest at $64.50 per barrel.

The 100 SMA is below the 200 SMA to signal that the path of least resistance is to the downside or that resistance is more likely to hold than to break. However, crude oil is above both moving averages, so these could hold as dynamic support on dips.

Stochastic has been indicating overbought conditions for a while, and turning lower would mean that sellers are returning. RSI has a bit of room to climb before reaching the overbought zone, so crude oil could still hover around the channel resistance for a while.

Crude oil is trending higher as more economies have been reopening, boosting demand for fuel and energy commodities. At the same time, the gas shortage in several US states likely lifted purchases of crude oil as well.

Risk appetite and inventory data would likely push crude oil around this week, although it’s also worth noting that the fresh surge in COVID-19 cases and fatalities is weighing on global outlook. After all, another set of lockdown measures and travel restrictions might weigh on fuel purchases once again.

In addition, the conflict in Israel and Palestine is also weighing on investor sentiment, likely leading traders to be quick about booking profits on any rallies. Any improvement in the situation could revive risk-taking, which would likely bring more gains for commodities.

The latest inventory report from the EIA printed a smaller than expected draw in stockpiles, signaling weaker purchases.