Oil crashes as Omicron fears reemerge

Oil fell below the 200-day moving average at 70.50 USD (the green line), changing the short-term outlook to bearish. That is the crucial resistance heading into the Christmas week.

Should the price return above 70.50 USD, we might see a rally toward last week's highs near 72.80 USD.

However, the medium-term outlook seems negative as the recent comeback looks only like a corrective rally of the significant November decline. Thus, oil could attack the critical support in the 62 USD region again. 

If the price declines below that support, the medium-term downtrend could be confirmed, killing all the stop losses below 62 USD and likely dragging the commodity below 60 USD. The target for the decline could be at March 2021 lows near 57 USD.

The hawkish Fed and still strong dollar are also weighing on oil. Additionally, more and more lockdowns and restrictions should be negative near-term.