WTI crude oil prices are recovering after having slid lower in early trading on Wednesday as the sentiment soured once again about fears of delayed economic recovery in the aftermath of the coronavirus pandemic even as US-China tensions continue to simmer. At the time of writing, WTI crude oil is trading at around $34.23 per barrel.

In recent weeks, crude oil prices had received some support and risen above the $30 level after OPEC+ countries cut crude production by nearly 10 million bpd starting in May. Meanwhile, some countries have started easing their lockdowns and reopening their economies, raising hopes that oil demand could improve in the near future.

However, according to analysts, in the wake of the shutdowns still in effect, the demand for gasoline in has already reduced by 30%. The most optimistic expectations indicate that oil markets could begin to stabilize by as early as June.

Even though restrictions are being eased, there is a significant risk of a second wave of coronavirus cases in countries where the pandemic has peaked. If this happens, it could force governments to repeat lockdowns, which could once again bring down the demand for oil in global markets.

Crude oil prices are also trading bearish on the back of escalating tensions between the US and China. On Tuesday, White House chief economic adviser Larry Kudlow cautioned China against implementing the national security law on Hong Kong, terming it a “big mistake”.