During Monday’s Asian trading session, the WTI crude oil prices failed to extend the winning streak of earlier in the day, dropping from $ 41.48 to the $ 40.59 level, as the worsening situation regarding the coronavirus (COVID-19)  in the UK, Europe and some of the notable Asian nations, like India, fueled doubts about the recovery in demand. This, in turn, undermined the crude oil prices. Furthermore, the restarting of oil rigs in the Gulf of Mexico, and internal tension within the Organization of the Petroleum Exporting Countries (OPEC), concerning the output cut agreement, added further pessimism regarding the crude oil prices.

Elsewhere, the US and Iran are once again on a confrontational track, as the US prepares to sanction over 20 firms tied to Tehran’s arms manufacturing industry. This also exerted downside pressure on the oil prices. On the contrary, the tropical storm in the US Gulf of Mexico region halted production to some extent, which helped to limit deeper losses in the crude oil prices.

Besides this, the weakness of the broad-based US dollar, ahead of the US Federal Reserve official’s speech, could also be considered a key factor that is keeping a check on any additional losses in the crude oil prices. At the moment, crude oil is trading at $ 40.56 and consolidating within a range between 40.37 and 41.48.

On the coronavirus front, the rising number of cases in the UK and Spain are continuously fueling the oil demand worries, keeping the oil prices under pressure as a result. Data suggests that approximately 30.78 million people are reported to be infected by the coronavirus globally, and 954,843​ have died. Europe has reported 300,000 new infections, the most notable weekly hike ever, even exceeding the first spike in spring, as per the regional director of the World Health Organization (WHO) Hans Kluge. France, Poland, the Netherlands and Spain are facing the second wave of the pandemic and the UK is already considering a new lockdown, while countries, like Denmark and Greece, announced new restrictions on Friday. These headlines added an extra burden to the crude oil prices.

On the other hand, the intensifying tensions between the US and China also put additional pressure on the crude oil prices. Added to the US-China tussle, Tehran and the US are at loggerheads, as the US is preparing to slap sanctions on over two dozen companies that help the Arab nation to build arms. Another factor weighing on the crude oil prices is the failure of the Democrats and the Republicans to offer any new announcement on the coronavirus (COVID-19) relief package, amid political differences.

On the USD front, the broad-based US dollar extended its bearish bias of the previous session, and it is still hovering on the bearish track on the day, ahead of the US Federal Reserve official’s speech, which is scheduled to happen later this week. Besides this, the decision over the inclusion of Chinese government bonds in the FTSE Russell World Government Bond Index (RWGBI) is also keeping the USD bulls on the defensive. However, the losses in the US dollar became a key factor that helped to limit any deeper losses in the crude oil prices. Meanwhile, the US Dollar Index, which tracks the greenback against a basket of other currencies, had fallen by 0.16%, to 92.870, by 9:55 PM ET (2:55 AM GMT).

Across the pond, the reason for the losses in crude oil could also be associated with the latest reports that Libyan commander Khalifa Haftar has promised to lift his 8-month blockade on oil exports.

Looking forward, the Chicago Fed National Activity Index, which is expected to come in at 1.95, against the previous 1.18, will be key to watch on the day. Apart from this, the continuous drama surrounding the US-China relations, and updates about the US stimulus package, will also be followed closely. In the meantime, the movement of the USD and coronavirus headlines will not lose any significance, and they could play a key role in the movements of the oil prices. Good luck!