During Thursday’s Asian trading hours, the WTI Crude Oil prices managed to put a stop to the previous day’s bearish streak, drawing some fresh bids around the mid-$ 45.00 mark, mainly due to the on-going optimism over the rollout of the COVID-19 vaccine in the UK and the expected approval of a vaccine in the United States, which eventually fueled hopes of a recovery in the fuel demand and contributed to the price gains in crude oil. Apart from this, another reason for the gains in crude could also be attributed to the intensifying nervousness among investors, due to the terrorist attack on two wells which were set ablaze at a small oilfield in northern Iraq.

Across the pond, the broad-based US dollar failed to gain any positive traction, remaining depressed ahead of the European session, which also lent some support to the crude oil prices, as the oil price is inversely related to the price of the US dollar. On the contrary, the downbeat EIA reports, which showed a large build in US crude stocks last week, also failed to put any bearish pressure on the crude oil prices. Most of the analysts were surprised at how the market was unaffected by this unexpectedly large build in US crude stocks. In the meantime, the downbeat market sentiment played a major role in capping the higher-yielding crude oil prices. On the other hand, the gains in crude were also capped by Brexit, uncertainty surrounding the US stimulus package and Sino-US tensions. At the moment, WTI Crude Oil is trading at 45.59, and consolidating in the range between 45.55 and 45.88.

As we have already mentioned, the US oil stockpiles rose last week, due to a fall in US crude exports to their lowest level since 2018, coupled with lockdown restrictions in several parts of the US, in an attempt to control the coronavirus, which kept a lid on the recovery in fuel demand. On the data front, the US Energy Information Administration (EIA) data showed a 15.189-million-barrel build for the week ending Dec. 4, which was much higher than the predicted 1.424-million-barrel draw and the previous week’s 679,000-barrel draw. However, the traders did not pay much heed to this data, and they continued to cheer the optimism over the UK’s rollout of a COVID-19 vaccination program and the imminent start of vaccinations in the US .

On the other hand, crude oil managed to halt its overnight losses, as oil traders started to focus on the news that the US policymakers had approved the sale of high-tech weapons from the US to the United Arab Emirates (UAE), for the war between the UAE and Iran. Apart from this, the gains in the crude oil prices were further fueled by reports suggesting that the US Food and Drug Administration (FDA) will meet later in the day to talk about BNT162b2, the COVID-19 vaccine, which was co-developed by Pfizer (NYSE: PFE) and BioNTech SE (F:22UAy). Canada also approved its first COVID-19 vaccine on Wednesday and said inoculations would start next week, which had a further positive impact on the crude oil prices.

Conversely, the market trading sentiment represented a negative performance on the day, as the bearish appearance of Asia-Pacific stocks and losses in US stocks futures tend to highlight the risk-off mood. However, the reason behind the risk-off market sentiment could be attributed to the news that the US has blacklisted Chinese crime bosses and some other diplomats from China, in anti-corruption crackdown sanctions. In the meantime, the uncertainty over the Brexit talks and growing numbers of coronavirus cases across the globe are putting further pressure on the equity market. These negative headlines were seen as one of the key factors that kept a lid on any additional gais in the crude oil prices.

Despite the risk-off mood, the broad-based US dollar failed to put a stop to the declining streak of the previous day, remaining bearish, as doubts persist over the global economic recovery from COVID-19, as witnessed by the downbeat US data. However, the losses in the greenback have become a key factor that is helping the crude oil prices to stay bid, 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 fallen to 91.043.

Moving ahead, the market traders will keep their eyes on the US stimulus headlines and vaccine news. In the meantime, the updates surrounding the Brexit trade talks and the Sino-US tussle have not lost any importance on the day. Good luck!