WTI crude oil is starting the fresh trading week on an extremely bearish note, falling to five month lows amid rising concerns about the economic impact of the second wave of the coronavirus pandemic, after more countries announced fresh lockdowns. At the time of writing, WTI crude oil is trading at around $34.46 per barrel.

Markets are trading with a risk-off sentiment as the number of infections continue to rise across parts of the US and Europe, even as traders eagerly await the results of the US presidential elections. The fresh spike in cases across Europe has prompted governments to bring back lockdowns, which are likely to not only hamper progress towards economic recovery but also dent oil demand once again.

The decline in crude oil prices eased somewhat on the release of encouraging economic data from Japan and China earlier in the session today. While Japan registered an increase in export orders for the first time in two years, factory activity across China saw the fastest growth in almost 10 years during October.

However, the overall sentiment among oil traders remains bearish amid worries about weakness in demand, especially after more countries reintroduce lockdowns and restrictions to curb the pandemic. In addition, increasing supply due to Libya restarting production is also exerting downward pressure on crude oil prices, causing US oil to weaken by 11% last month.