WTI crude oil is starting the fresh week on a bearish footing, with prices declining on the back of a continued increase in fresh coronavirus infections worldwide, forcing governments to impose more lockdowns and restrictions. At the time of writing, WTI crude oil is trading at around $46 per barrel.

After strengthening for the fifth straight week, WTI crude oil prices weakened after Los Angeles registered a record surge in new cases even as South Korea raised its alert level due to the resurgence in cases. Bavaria, Germany has announced stricter lockdown measures while Seoul, South Korea is expected to see more social distancing measures being enforced.

With more lockdowns and restrictions expected due to the fresh wave of the pandemic, oil markets are focusing on the possibility of further weakness in oil demand, which is driving bearishness in the commodity. In addition, an increase in lockdowns could also impede economic recovery – a key driver of oil demand, and continue to keep demand from improving.

In addition, crude oil is also facing downward pressure over recent news reports about how Iran is planning to resume production and sale of oil at full capacity over the next three months despite the sanctions. Iran is hopeful that its plans to agree to the 2015 nuclear deal could convince the US to ease sanctions and allow it to export oil again, which could further increase oil supply even as demand fails to recover.