WTI crude oil is under some downside pressure again as price fell back to the channel support after a quick bounce. A break below this level could set off a steeper slide for the commodity.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. Price is also moving below both indicators as confirmation of selling pressure.

However, stochastic is pulling up from the oversold region to suggest that buyers are taking over while sellers take a break. RSI is also heading up from the oversold territory so price could follow suit while bullish momentum is in play. With that, a pullback to the channel top at $40 per barrel or at least until the $39 per barrel mid-channel area of interest could take place.

Crude oil remains on weak footing as risk-off flows continue on account of the resurgence in COVID-19 cases all over the globe. After all, this could prompt another set of restrictions on trade and travel that could limit demand for energy and fuel. At the same time, slower business and consumer activity could also drag commodities down overall.

Geopolitical risks and election-related uncertainties have also contributed to risk aversion in the markets over the past weeks.

Meanwhile, the EIA reported a surprise decline of 2 million barrels in stockpiles versus the expected increase of 1 million barrels and the earlier reduction of 1.6 million barrels. This suggests that demand remains supported, although output might have also been constrained on account of weather disturbances.

Libya is reportedly resuming production while the OPEC has boosted exports in the past month, keeping traders on the lookout for potential global oversupply.