During Tuesday’s Asian trading hours, the WTI Crude Oil prices managed to extend the bullish streak of the previous day. They hit the highest level since March, above the mid-$43.00 mark,  mainly due to the prevalent optimism over a potential vaccine for the highly infectious coronavirus, which ultimately fueled hopes for a recovery in the fuel demand and contributed to the gains in crude.

Apart from this, the reason for the gains in crude oil could also be associated with fresh reports suggesting that the US presidential transition has finally started, which offers political certainty. Moreover, the sentiment surrounding crude oil was further improved by the renewed hopes that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will maintain their current production restrictions. This tends to ease oversupply fears and boosts the oil prices.

The upbeat market sentiment also plays a major role in underpinning the higher-yielding crude oil prices across the pond. The upbeat market mood is being supported by hopes of a coronavirus vaccine and Brexit talks, which have contributed to the failure of the broad-based US dollar to gain any safe-haven bids, causing it to edge lower on the day. In turn, this has also played a leading role in underpinning the crude oil prices, as the oil price is inversely related the price of the US dollar. Conversely, the gains in the crude oil prices could be capped by the concerns over the escalation of the COVID-19 pandemic, which keep fueling fears of renewed lockdowns in several countries. WTI Crude Oil is currently trading at 43.50, and consolidating in a range between 42.83 and 43.56.

As we have already mentioned, the market trading sentiment performed positively on the day, as the bullish appearance of Asia-Pacific stocks and the gains in the US stocks futures tend to highlight the risk-on mood. However, the reason behind the risk-on market sentiment could be attributed to a combination of factors – be it the renewed optimism over a possible vaccine for the highly infectious coronavirus or the certainty surrounding the US electoral transition, not to forget the upcoming Brexit talks, everything has favored the markets on Wall Streetrecently. That was witnessed after the S&P 500 Futures rose over 18 points, or 0.52% intraday. This upbeat market sentiment played a significant role in underpinning the higher-yielding crude oil prices.

It is worth recalling that there are currently three viable coronavirus vaccines, with AstraZeneca PLC (LON:NASDAQ: AZN) adding its candidate to those of Pfizer Inc (NYSE:NYSE: PFE) and Moderna Inc (NASDAQ:NASDAQ: MRNA). The US has announced that it will probably start a vaccination program by Dec. 12. These positive developments surrounding the COVID-19 vaccine favor the risk-on mood in the market. Elsewhere, the upbeat printouts of the US PMIs for November lend additional support to the optimists.

On the front, US equity market has received an additional boost from the news that US President Donald Trump has ultimately accepted his failure in the recent election, and has ordered the General Services Administration to start the power shift to President-elect Joe Biden. This has generated political certainty and boosted the sentiment on the equity markets. In the meantime, the talks concerning Janet Yellen’s return to the US policy board, this time as Treasury Secretary, have also lent some support to the equity markets.

As a result, the broad-based US dollar failed to gain any bullish traction, remaining bearish on the day, as doubts persist over the global economic recovery from COVID-19. Besides this, the risk-on market sentiment, backed by the optimism over a potential vaccine for the highly contagious coronavirus, also played a major role in undermining the safe-haven US dollar. However, the losses in the US dollar have become a key factor that has kept a lid on additional losses in crude oil prices, as the oil price is inversely related to the price of the greenback. Meanwhile, by 10:02 PM ET (2:02 AM GMT), the US Dollar Index, which tracks the greenback against a bucket of other currencies, had dropped by 0.03%, to 92.487.

Across the ocean, the gains in crude oil were further bolstered by the hopes that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group led by Russia and known as OPEC+, will uphold its current production restrictions. This news tends to ease oversupply concerns and boost the crude oil prices. Furthermore, the increasing odds of a soft Brexit deal have also had a bullish impact on crude oil prices.

Conversely, the gains in crude could be capped by the on-going fears of rising numbers of COVID-19 cases in the US, Europe and some of the notable Asian nations, which are continually fueling the fears of renewed lockdowns in several countries. This has also become a key factor that has kept a lid on any additional gains in the crude oil prices. It is worth recalling that Europe and the US are imposing back-to-back lockdown restrictions, amid surging numbers of coronavirus cases.

Looking ahead, the market traders will keep their eyes on comments from BOJ and Federal Reserve policymakers, which are likely to entertain market players, amid a light data calendar. All in all, the updates surrounding the Brexit, the coronavirus woes and US stimulus package news will not lose any significance. Good luck!