WTI clung to $70.00 as more countries reimpose restrictions amid an Omicron variant outbreak

• WTI, US crude oil benchmark falls some 1.41%, as COVID-19 infections rise.
• In Europe, Italy, and Scotland, among other countries, impose restrictions as COVID-19 infections climb.
• WTI Technical Outlook: In the near-term has a downward bias, though the upside risks remain.

US crude oil benchmark, also known as Western Texas Intermediate (WTI), is falling during the day as the Asian Pacific session begins, trading at $70.00 at the time of writing. Market conditions had not improved since the early European session when it crossed the wires that two doses of the Pfizer-BioNTech vaccine provided a 70% protection against the newly Omicron variant. The sentiment got follow-through in the New York session, as investors appeared to be sidelined despite the aforementioned, waiting for the Federal Reserve’s last monetary policy meeting decision.

Additionally, some countries started to impose restrictions amid the outbreak of the Omicron variant. Italy will require travelers from other EU countries to provide a negative COVID-19 prove, and Scottland urges no more than three households to mix.

On Tuesday in the overnight session, the black gold peaked at around $71.75, then plunged two dollars, as market mood remained sour, as market participants weighed on central banks, hosting their last monetary policy meetings of the year. Then, it jumped up to $70.75, some $0.50 above the 200-hour simple moving average (SMA), which was reclaimed by oil bears, pushing the price near the $70.00 psychological level.

On the crude-oil-related macroeconomic front, on Tuesday, the American Petroleum Institute reported that US supplies fell 815K barrels last week, according to sources cited by Bloomberg. Data showed that stockpiles increased, though the US government will release its inventory on Wednesday.

Moreover, the Organization of Petroleum Exporting Countries and its allies (OPEC+) increased its outlook for oil consumption in the Q1 of 2022, up to 1.1 million barrels a day, equivalent to an annual world consumption growth in a “typical” year before the pandemic, according to Bloomberg.

On its 2022 outlook, OPEC mentioned that the Omicron variant is expected to have a mild impact as the world gets used to dealing with the COVID-19 pandemic.

WTI Price Forecast: Technical outlook

WTI’s daily chart shows that oil had been in consolidation since Tuesday last week. WTI has a downward bias in the near-term, as WTI bears reclaimed the 200-DMA, which lies at $70.18, piercing under the latter, threatening of breaking below the $70.00 figure.

Failure of WTI bulls to reclaim the 200-DMA would expose the December 14 low at $69.33. A break below that level would expose the figure at $69.00, followed by a retest of September 1 low at $67.01

To the upside, the first resistance would be the 200-DMA. The breach of the latter would expose the December 14 high at $71.79, followed by the psychological $72.00 figure. With a clear break to the upside, the next supply zone would be $73.00.