Crude Oil Trims Strong Early-Day Gains – OPEC-JMMC Meeting in Focus!
Arslan Butt • 3 min read
During Thursday’s Asian trading session, the WTI crude oil price lost some of its bullish early-day ground, but remained traded well above the $ 45.00 level, as OPEC+ resumed talks on an extension of the output cuts after an impasse, which underpinned the crude oil prices. Apart from this, the hopes surrounding further financial stimulus and coronavirus vaccines are also lending support to the higher-yielding oil. On the western side of the Atlantic, the reason for the gains in the crude oil prices could also be associated with the weakness of the broad-based US dollar, which tends to underpin the crude oil prices, due to the inverse relationship between the price of oil and the greenback. However, the sentiment surrounding the US dollar was under pressure, due to the possibility that the US economic stimulus measure will soon be passed, coupled with the first approval of a COVID-19 vaccine, both of which have urged investors towards riskier currencies and higher-yielding assets rather than the safe-haven assets.
On the contrary, the smaller-than-expected draw in the US weekly crude stockpiles data, as shown by the Energy Information Administration (EIA), keeps challenging the upside momentum of crude oil, and enhancing the key factor that has put a lid on any further gains in the crude oil prices.
The gains in the crude oil prices were also capped by the on-going worries over the intensifying coronavirus situation in the US and Europe, which keeps fueling doubts over economic recovery. At the moment, crude oil is trading at $ 45.05, and consolidating in a range between 44.67 and 45.40.