WTI Fails to Extend its Bullish Bias of the Previous-Day – A Fundamental Outlook!
Arslan Butt • 3 min read
During Wednesday’s early Asian trading session, the WTI Crude Oil prices failed to extend their winning streak of the previous day, taking some fresh offers closer to the $ 41.00 level, mainly after the bigger-than-expected build in US crude stockpiles, which instantly triggered fears of a weak fuel demand and contributed to the losses in crude. Apart from this, the renewed concerns over the global economic recovery, amid the rising number of COVID-19 cases, tends to undermine the oil demand and drag the oil prices lower.
The delay in the US COVID-19 aid package has also exerted downside pressure on the crude oil prices. Across the pond, the geopolitical tensions between China and some notable countries like the US, also played a leading role in undermining crude oil prices. On the other hand, the fresh bullish trend in the broad-based US dollar, triggered by the risk-off market sentiment, has added a further burden to the crude oil prices, 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 the Brexit trade deal have become a key factor that is helping to limit deeper losses in the crude oil prices. In the meantime, the losses in crude were somewhat capped by the hopes that OPEC and its allies will postpone the increase in oil output planned for January. At the moment, crude oil is trading at $ 41.20 and consolidating in the range between 41.08 and 41.4.2