During Wednesday’s Asian trading session, the WTI Crude Oil prices failed to extend the bullish run-up of the two previous consecutive sessions, dropping below the $ 40.00 level, after Tuesday’s American Petroleum Institute (API) figures showed a build in crude oil inventories of 951,000 barrels for the week ending Oct. 2. This, in turn, undermined the crude oil prices. On the flip side, the US dollar picked up a bit on the day, after President Trump tweeted that he had stopped discussions on the fiscal stimulus package until after the election, which fueled concerns about the US economic recovery and pushed stocks lower. This, in turn, weighed on the crude oil prices, as the price of oil is inversely related to the price of the US dollar.

Across the ocean, the risk-off market sentiment, backed by geopolitical tensions between China and the US, also favored the crude oil bears and kept the prices under pressure. On the contrary, the Laderne labor union said on Tuesday that it would expand its current oil strike to Oct. 10, unless a wage deal can be reached in the meantime. This oil strike has led to a production shutdown, which could be considered one of the key factors that is helping to limit deeper losses in crude oil prices. At the moment, crude oil is trading at $ 40.05, and consolidating between 39.47 and 40.36.

On the data front, on Tuesday, the American Petroleum Institute (API) reported a build in crude oil inventories of 951,000 barrels for the week ending Oct. 2,  against the predicted 831,000-barrel draw. The bearish report initially weighed on the oil prices.

Something else that might also be undermining the crude oil prices could be the latest reports claiming that President Trump has halted discussions on the fiscal  stimulus package until after the election, which eventually revived concerns about the US economic recovery losing traction. This, in turn, pushed the market trading sentiment down and contributed to the losses in the oil prices. Apart from this, the bearish sentiment surrounding crude oil was further bolstered by bearish reports that Aramco’s CEO, Amin Nasser, said that the company may sell some of its domestic assets, as cited by Energy Intel’s Amena Bakr.

Across the ocean, the second wave of the coronavirus could be considered as the major factor behind the bearish run-up in oil. As per the latest report, the number of COVID-19 cases continues to rise in India, the UK, Spain and some parts of the US. Furthermore, the tensions between the United States and China continue to pick up pace. It is worth recalling that the Dragon Nation continued to criticize the US ban on TikTok and WeChat at the World Trade Organization (WTO) meeting. These gloomy headlines exerted downside pressure on the market trading sentiment, which also kept crude oil under pressure.

On the USD front, the broad-based US dollar extended its early bullish trend and was still flashing green on the day, due to the risk-off sentiment in the market. Moreover, Trump’s decision to cancel stimulus talks until after the Nov. 3 presidential election increased downside risks for an already unstable US economy, and the Covid-19 virus, which is running wild through many states, boosted the dollar, as traders deserted more risky currencies. However, the gains in the greenback kept the oil prices under pressure, as the price of oil is inversely related to the price of the US dollar. Meanwhile, by 10:02 PM ET (2:02 AM GMT), the US Dollar Index, which tracks the greenback against a basket of other currencies, rose by 0.19%, to 93.922.

Looking ahead, the market players will keep their eyes on the release of the latest FOMC monetary policy meeting minutes. Meanwhile, the updates surrounding the fresh Sino-US tussle and the coronavirus (COVID-19), chave not lost any significance. Good luck!