WTI Crude Oil Dips as Demand Concerns Outweigh Hopes for Fresh Stimulus
Arslan Butt • 1 min read
On Tuesday, WTI crude oil prices are still trading bearish with the spotlight on weak demand due to the ongoing coronavirus pandemic, even as the US gets ready to unveil its next round of fiscal stimulus measures. At the time of writing, [[WTI] crude oil is trading at around $40.36 per barrel.
During the previous session, US oil had strengthened by around 1% on encouraging news about Democrats revealing a new $2.2 trillion coronavirus relief package – a compromised bill with reduced spending as Republicans had insisted on. In case the stimulus bill gets approved, it could offer some relief to the US economy and help in its recovery, and even drive the demand for oil higher as a result.
Although over recent sessions, WTI crude oil had reclaimed previous highs last seen in early March, demand concerns have caused prices to drop by as much as $3 per barrel since then. The ongoing pandemic and lockdowns have severely reduced the demand for oil and even deeper supply cuts by OPEC and allies have been unable to balance the global markets.
News reports about fresh restrictions being imposed in Quebec, Canada due to a resurgence in coronavirus cases have also exerted downward pressure on crude oil prices. In addition, Japan’s crude imports fell by almost 26% during August, reinforcing traders’ worries about weakness in demand.