During Monday’s Asian trading hours, WTI Crude Oil started a new week on the bullish track, taking bids well above the $ 52 level. However, the prevalent bullish bias surrounding the crude oil prices was supported by the vaccination programs, which are getting underway in hard-hit countries. Meanwhile, the production cuts by major producers, like Saudi Arabia, are also playing a major role in supporting the crude oil prices. Across the ocean, the bullish bias surrounding the crude oil prices could also be attributed to the reports suggesting that US President Joe Biden is set to meet with 10 Republican senators to discuss the COVID-19 relief aid package.

The optimism over coronavirus vaccines and the likelihood of an additional US financial aid package underpinned the market trading sentiment, contributing to the higher-yielding gains in crude oil. Furthermore, the broad-based weakness of the US dollar, triggered by the upbeat market mood, also lent some support to the crude oil prices, as the price of oil is inversely related to the price of the greenback. On the bearish side, the resurgence of COVID-19 globally, and the discovery of new variants, might cap further gains in crude oil. Meanwhile, the downbeat Chinese data released last week was also seen as one of the key factors that kept a lid on any additional gains in crude oil. WTI Crude Oil is currently trading at 52.47, and consolidating in a range between 51.66 and 52.49.

The S&P 500 Futures succeeded in stopping its downbeat performance of Friday, taking some bids well above the day’s level of 3,700. The main factor behind this positive performance was the optimism regarding an additional US financial aid package, triggered after a tweet by US Republican Senator Susan Collins, suggesting that President Biden is expected to meet 10 Republican Senators today to discuss the COVID-19 relief aid package. Meanwhile, another reason for the positive market performance could also be attributed to the optimism over the rollout of vaccines for the highly contagious disease. This, in turn, was seen as one of the key factors that underpinned the crude oil prices.

Furthermore, the crude oil prices got an additional lift after Saudi Arabia promised to continue to cut crude output by one million barrels a day in February. Apart from this, the successful coronavirus vaccine trials and declining numbers of infections in some areas also exerted some positive impact on the crude oil prices. As a result of an upbeat market mood, the broad-based US dollar failed to stop its early-day bearish moves, remaining depressed on the day, as the demand for safe-haven assets decreased, amid progress toward agreeing on the US fiscal stimulus. However, the losses in the US dollar helped to keep crude oil bid, as the oil price is inversely related to the price of the greenback. Meanwhile, by 10:59 PM ET (3:59 AM GMT), the US Dollar Index, which tracks the greenback against a bucket of other currencies, had dropped by 0.01% to 90.523.

On the bearish side, the worries about new coronavirus infections, the discovery of new variants and the economically-painful hard lockdowns keep challenging the upbeat market performance, which has become a key factor that could cap the crude oil prices. Another reason for the capping of the gains could be the disappointing data from China, which reported lower-than-expected manufacturing and non-manufacturing purchasing indexes (PMI) on Sunday. On the data front, the manufacturing PMI was 51.3, against the forecasts of 51.6, and 51.9 in December. The non-manufacturing PMI came in at 52.4, against  55.7 in December. Moving ahead, the market traders will keep their eyes on the release of US ISM Services PMI for January. Meanwhile, the updates surrounding the coronavirus vaccine and the US financial aid package will not lose their importance on the day. Good luck!