During Wednesday’s Asian trading session, the WTI Crude Oil prices failed to put a stop to the long losing streak of the previous week, remaining bearish around the $ 46.50 level. This was mainly due to the American Petroleum Institute data showing that US crude oil stocks rose last week, against expectations for a decline, which in turn, raised fears about oversupply and contributed to the losses in crude.

Let me remind you that the crude oil prices recovered last week, after positive developments concerning the coronavirus (COVID-19) vaccines and the COVID-19 stimulus package. However, the gains were short-lived or temporary, as the number of COVID-19 cases continued to grow in the US and the UK, which urged policymakers to warn people, once again, to avoid traveling for Christmas, resulting in a dampened fuel demand. Apart from this, another reason for the heavy losses in the crude oil prices could also be attributed to the on-going chatter over the US coronavirus (COVID-19) aid package and government spending.

The losses in the crude oil prices were further bolstered after the United States imposed more visa restrictions on China, while also making serious allegations regarding the Russian hack on the Treasury. Meanwhile, European Union (EU) policymakers seem dissatisfied with the UK’s relief on fisheries, which raised further uncertainty over the Brexit trade deal, adding further pressure to the crude oil prices. At the moment, WTI Crude Oil is trading at $ 46.25, and consolidating in a range between 46.20 and 46.89. Moving on, traders seem cautious to place any strong positions ahead of the crude oil supply data from the US Energy Information Administration, which is due for release later in the day.

As we have already mentioned, the latest build in US crude oil supplies and travel restrictions, in an attempt to slow the spread of a new mutant strain of the COVID-19 virus, have played a major role in undermining the crude oil prices. On the data front, the American Petroleum Institute data showed a build of 2.7 million barrels in the US crude oil supply for the week ending Dec. 18. The build was larger than both the 3.25-million-barrel draw in the forecasts and the previous week’s build of 1.973 million barrels.

On the other hand, the on-going concerns regarding the next pandemic, due to the mutation of the COVID-19 virus, which has lead to renewed lockdown measures, continuously threatens the crude oil demand. As per the latest report, the number of COVID-19 cases is increasing day by day in the United States, with more than a million new cases in just 6 days, and US citizens were being issued with warnings, once again, to avoid traveling for Christmas. It is worth mentioning that the B.1.1.7 strain of the COVID-19 virus was first recorded in the UK, and it could already have spread to nearby countries like France, Germany and Switzerland. As a result, the UK itself has already imposed a Tier 4 lockdown in London and southeastern England, which in turn, is putting pressure on an already weak fuel demand.

Considering the current conditions in the UK, earlier today the Philippines put a ban on all UK flights from Dec. 24. This happened after more than 40 countries shut their borders to the United Kingdom, which is exerting downside pressure on the market risk tone and contributing to crude oil losses.

In addition to the above, another reason for the bearish crude oil prices could also be associated with the long-lasting US-China tussle, which is still not showing any signs of slowing downs as the US has imposed additional visa restrictions on the Dragon Nation, while also making serious accusations regarding a Russian hack on the US Treasury.

Elsewhere, the Brexit issue remains on the cards, as European Union (EU) policymakers seem dissatisfied with the UK’s relief on fisheries. Therefore, the fisheries and a level playing field are still the biggest hurdles in the talks. The decline in crude oil prices across the ocean could also be attributed to the rising uncertainty over the much-awaited aid package. It should be noted that the Senate passed a bill for the latest US stimulus measures at the beginning of the week, after it was passed by the House of Representatives earlier. Afterwards, President Donald Trump declared that he might not sign the bill, which now awaits his signature before it comes into force. Trump said on Tuesday that the bill should be changed to increase the amount of the stimulus checks.

The market trading sentiment has been shooting red signals since the day started, so the reason for the mixed trading could be attributed to the mixed signals concerning the coronavirus (COVID-19) and the latest chatter concerning the much-awaited aid package. Despite the risk-off market sentiment, the broad-based US dollar failed to maintain its bullish bias of the previous day, edging lower during the Asian trading session, possibly due to the downbeat US consumer and housing data. However, the losses in the greenback have become a factor that is helping to limit deeper losses in the crude oil prices, as the price of oil is inversely related to the price of the US dollar.

In December, the consumer confidence index sank to 88.6, against the forecast of 97 and November’s reading of 92.9. Meanwhile, the Existing Home Sales also dropped to 6.69 million in November, against the forecast of 6.7 million and October’s 6.86 million.

Moving on, the market traders will keep their eyes on the crude oil supply data from the US Energy Information Administration, which is due to be released later in the day. In addition to this, the updates regarding the US stimulus package will also be closely observed. Good luck!