During Monday’s early Asian trading hours, WTI crude oil prices extended their overnight bullish rally and hit the multi-month high above mid-$67.00, mainly after the reported attack on Saudi Arabian oil facilities, which gave the black liquid a boost. It is worth recalling that crude oil prices rose last week after Saudi Arabia and OPEC+ promised to maintain output steady in April, which accelerated a rally this year that has seen prices surge by more than 35%. Apart from this, the reason for the bullish oil prices could also be tied to the positive news concerning the U.S. coronavirus (COVID-19) aid package. The S&P 500 Futures cheered the much-awaited stimulus’s approval, which in turn boosted the higher-yielding crude oil prices.

Meanwhile, upbeat Chinese trade figures also played a major role in supporting oil prices. Moreover, the upticks were further bolstered by the ongoing optimism over the potential vaccine/treatment for the highly infectious coronavirus. Besides, oil prices got some additional support from the weaker U.S. dollar as oil is inversely related to the U.S. dollar. Alternatively, the absence of major data/events and the Sino-US tussle may limit the upside momentum of the commodity. WTI crude oil is currently trading at 67.94 and consolidating in the range between 66.69 – 67.98.

The market trading sentiment managed to start this week on a positive track as the bullish appearance of Asia-Pacific stocks and the U.S. stocks futures’ gains tend to highlight the risk-on mood. The reason could be associated with the positive news concerning the U.S. coronavirus (COVID-19) aid package. The U.S. Senate finally managed to approve President Joe Biden’s $1.9 trillion COVID-19 relief package with 50-49 votes late last week. The bill will now be discussed in the House and maybe voted on Tuesday. Thus, the upbeat tone around the market trading sentiment helps the higher-yielding crude oil prices to stay bid via U.S. dollar weakness.

Apart from this, the upbeat market sentiment could also be attributed to upbeat trade figures from China, which boosted the hopes for economic recovery. China’s 60% spike in Trade Balance (USD terms) during January and February, to $103.25B, provided additional support to crude oil prices.

Furthermore, the energy benchmark got an additional lift after the reported attack on Saudi Arabia’s oil facilities, which gave the black liquid a boost. As per the latest report, Iran-backed Houthi forces fired drones and missiles to target the Saudi Arabian oil industry this weekend, including Saudi Aramco’s facility at Ras Tanura. However, Riyadh labeled the attack as a failed assault on global energy security after the drones and missiles were stopped. Apart from this, the reason for the bullish oil prices could also be tied to the news suggesting that Saudi Arabia’s hike in the official selling price (OSP) for its Arab Light crude to Asia by $1.40 per barrel.

Conversely, the absence of major data/events and the Sino-US tussle keep challenging the market risk-on mood, which could trim gains in the crude oil prices. At the US-China front, China’s Foreign Minister Wang Yi urged America to “stop crossing lines and playing with fire” on Taiwan. In the absence of the major data/events on the day, the markets will keep their eyes on the U.S. traders’ reaction to the market-positive news, especially after Friday’s upbeat NFP. Meanwhile, the risk catalyst and the U.S. dollar moves will also be key to watch. Good luck!