During Monday’s early Asian trading session, the WTI Crude Oil prices failed to stop their declining streak of the previous week, dropping to a fresh low below the $ 34.00 level on the day, mainly due to the renewed concerns over the global economic recovery, as the number of COVID-19 cases continues to increase in Europe and the US. Let me remind you that the number of cases in the United States rose to a fresh all-time high of 76,302 on Oct. 29. In the meantime, the UK has declared a national lockdown, as the number of new cases daily has risen to 50,000 for the last few days, which is threatening the oil demand and dragging the oil prices lower.

Apart from this, the delay in the US COVID-19 aid package and the jitters ahead of the American presidential election are also exerting downside pressure on the crude oil prices. Across the pond, the geopolitical tensions between China and some notable countries, like the US and Australia, also played a significant role in undermining the crude oil prices. On the other hand, the fresh bullish bias of the board-based US dollar, triggered by the risk-off market sentiment, dragged the crude oil prices down, as the price of oil is inversely related to the price of the US dollar. On the contrary, the positive talks between the UK and the European Union, over Brexit, has become a key factor that is helping to limit deeper losses in the crude oil prices. At the moment, crude oil is trading at $ 34.19, and consolidating in the range between 33.65 and 35.09.

As we have already mentioned, fears of rising numbers of COVID-19 cases in the US, Europe, and some of the notable Asian nations are continually fueling worries over the economic recovery, which has, in turn, undermined the crude oil prices. As per the latest report of the COVID-19 Tracking Project, the number of cases in the US rose to a fresh all-time high of 76,302 on Oct. 29. On the European front, the figure for the UK has risen to 50,000 new cases per day for the last few days, resulting in the United Kingdom becoming the latest European major to announce a national lockdown. Considering the current condition surrounding the coronavirus in Europe, the major Europeans states, like Germany and France, are ready to enter partial one-month lockdowns in efforts to halt the growing second wave of the pandemic. This, in turn, has continued to weigh on the outlook for the crude oil demand.

Apart from this, the inability of the US Congress to offer a new stimulus package and disappointed markets ahead of the key US elections, where the Democratic victory is broadly expected, are also playing a major role in undermining the crude oil prices. In the meantime, the rising tensions between the United States and China are still picking up pace, which is putting additional pressure on the market sentiment and contributing to the losses in crude oil.

As a result, the broad-based US dollar managed to extend its bearish bias of the previous week, taking some further bids on the day, amid a risk-off market sentiment and upbeat data from the world’s largest economy, which tends to underpin the US dollar. However, the gains in the greenback could be short-lived or temporary, amid worsening coronavirus (COVID-19) conditions in the US or the delay in the US COVID-19 aid package, not to forget the jitters ahead of the American presidential election. All of these factors are boosting the fears of an economic slowdown. Thus, the gains in the US dollar could also be a key factor that has kept the crude oil prices down, as the price of oil is inversely related to the price of the US dollar. Meanwhile, the US Dollar Index, which tracks the greenback against a bucket of other currencies, has risen to 94.037.

Across the pond, the losses in the crude oil prices could also be associated with reports by the Norwegian consultants Rystad Energy, suggesting that the European oil demand is likely to contract by 10% of the current 13 million bpd oil consumption in November, or more than 1 million bpd in demand.

On the contrary, the positive talks between the UK and the European Union over Brexit have become the key factor that is helping to limit deeper losses in the crude oil prices. As per the latest report, the Brexit talks have finally started flashing positive signals, which in turn is helping to limit deeper losses in terms of the market trading sentiment.

Looking forward, the traders will keep their eyes on China’s Caixin Manufacturing PMI and the US ISM Manufacturing PMI for October. Apart from this, the continuous drama surrounding the US-China relations and updates about the US stimulus package will not lose any significance. Good luck!