During Monday’s Asian trading session, WTI crude oil managed to extend its early-day gaining streak & remained well bid around above $66.00 level mainly due to the optimism concerning the U.S. COVID-19 aid package, which bolstered fuel demand recovery hopes and contributed to the bullishness. The U.S. COVID-19 aid package’s expectations were triggered following President Joe Biden signing the $1.9 trillion stimulus package into law on Friday. Meanwhile, the growing optimism for output cuts from major producers also played its major role in supporting the oil prices.

Furthermore, the gains got an additional boost after the release of better-than-expected Chinese Retail Sales and Industrial Production figures, which helped balance an unexpected increase in unemployment rate and disappointing Fixed Asset Investment data. Apart from this, the bullish bias around the crude oil prices could also be attributed to the latest reports suggesting that AstraZeneca defied blood clotting calls due to its COVID-19 vaccine usage. As a result, the upbeat market mood has played a significant role in supporting the higher-yielding crude oil prices. In the different chapters, the broad-based U.S. dollar strength, backed by the upbeat U.S. data, was seen as one of the key factors that capped the upside momentum for crude oil as the oil price is inversely related to the price of the U.S. dollar. The greenback strength, a thin calendar, and Sino-American tussle also weighed on the crude oil prices. WTI is trading at 66.00 and consolidating in the range between 65.59 – 66.41.

The market trading sentiment has been flashing green signals since the day started as the release of better-than-expected Chinese Retail Sales and Industrial Production figures suggesting the notable recovery in the world’s 2nd-largest economy provided support to the market trading sentiment to stay bid. At the data front, China’s January-February Retail Sales YoY, the number came in at 33.8% vs. +32.0% expected and +4.6% previous, with Industrial Production YoY at +35.1% and +30.0% expected and +7.3% previous. In the meantime, Fixed Asset Investment YoY unchanged at 35.0% vs. +40.0% expected and +2.9% previous.

Apart from this, the bullish bias around the equity market could also be attributed to the hopes of more fiscal relief and chatters that Tokyo is not looking for an extension of the virus-led emergency. In that way, the positive tone around the market sentiment played a major role in supporting the higher-yielding crude oil prices. Despite the risk-on mood, the broad-based U.S. dollar extended its previous-session winning streak and took some further bids on the day, possibly due to the upbeat U.S. data published on Friday which revealed that the Producer Price Index (PPI) increased 0.5% month-on-month in February, versus the 0.5% growth in forecasts. It grew 2.8% year-on-year, against the forecast of 2.7%. The core PPI increased 0.2% month-on-month and 2.5% year-on-year. This was seen as one of the key factors that underpin the U.S. dollar.

Meanwhile, the increasing market bets concerning faster U.S. economic recovery from the pandemic lending some additional support to the U.S. dollar. However, the gains in the U.S. dollar were seen as one of the key factors that kept the lid on any additional gains in the oil prices as the price of oil is inversely related to the price of the U.S. dollar. The U.S. dollar climbed 0.1% against the yen to 109.125 yen, drifting near its highest since June 2020.

Besides this, the bullish bias around the crude oil prices could also be attributed to the reports suggesting that Saudi Arabia, the top oil exporter globally, reportedly cut the supply of April-loading crude to at least four north Asian buyers by up to 15%. In contrast, normal monthly requirements were met for Indian refiners. Meanwhile, the Organization of Petroleum Exporting Countries and its allies (OPEC+) also keep a tight lid on stockpiles, which keeps helping the crude oil prices rise in 2021. Traders will keep their focus on broader market risk sentiment and the USD price dynamics, which may provide some trading opportunities ahead.