Crude oil's price-action last week indicated that a steep fall could be around the corner in the upcoming weeks as the beginning of the Chinese Lunar New Year on Saturday could add one more leg to COVID threats.
Despite the war-footing efforts to control the resurgence of the pandemic, the per capita medical resources are relatively insufficient in rural areas where a majority of the Chinese population resides.
WTI crude oil futures wobbled during the last four weeks amid growing expectations that China's reopening will eventually reinvigorate a $17 trillion economy suffering its lowest growth in nearly half a century.
In the weekly chart, crude oil prices have been sliding since forming a ‘bearish cross’ in the third week of July 2022.
Currently trading below the 9-day moving average (DMA), crude oil prices are likely to remain under selling pressure during the upcoming week and could repeat the slide that was witnessed in 2022 from the same levels.
If the prices do not find a breakout above the significant resistance at $93 despite repeated attempts, a steep slide is likely during the upcoming weeks.
In the daily chart, crude oil prices look weak below the immediate resistance at $82, which seems to be a tough resistance. Undoubtedly, the formation of an 'Exhaustive Candle' in the daily chart ensures a steep slide in the upcoming week.
I conclude that crude oil prices have closed the last week just below a stiff resistance, which has been tested during the years 2021 and 2022, which means that a steep slide is likely in the upcoming weeks.
Secondly, dismantling COVID-19 restrictions by China and the rising pandemic threat could delay economic recovery.
Disclaimer: The author of this analysis does not have any position in crude oil prices. Readers are advised to take any position at their own risk.