During Monday’s Asian trading session, WTI crude oil failed to stop its last week’s losing streak and remains depressed around below the $60.00 level as the coronavirus (COVID-19) fears US-China tussles weigh on market trading sentiment, which in turn, undermined the higher-yielding oil prices. Meanwhile, the long-lasting concerns over the fresh COVID-19-induced lockdowns in Europe re-triggered fuel demand worries and contributed to the crude oil losses. In addition to Europe, Australia’s 3rd-largest city by population declared a 3-day lockdown after society transmission of the virus was detected last week, which adds further burden on the crude oil prices.

Apart from this, Indonesia saw a huge explosion just as Ever Given was dug out from the Suez Canal. Besides this, the broad-based U.S. dollar bullish bias, backed by a combination of factors, was also seen as one of the key factors that kept the crude oil prices under pressure as the oil price is inversely related to the price of the U.S. dollar. Alternatively, the hopes of a U.S. $3.0 trillion infrastructure spending plan from U.S. President Joe Biden and his push for faster vaccinations keep helping the higher-yielding crude oil prices to limit deeper losses. Also capping the losses could be the hopes that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will maintain lower output levels. At the moment, crude oil is trading at $59.56 and consolidating in the range between 59.44 and 61.18.

Despite the expectations of a U.S. $3.0 trillion infrastructure spending plan from U.S. President Joe Biden and his push for faster vaccination, the market trading sentiment is representing a negative performance on the day as the bearish environment around the Asia-Pacific stocks and losses in the S&P 500 Futures, tend to highlight the risk-off mood. However, the reasons could be tied to the coronavirus (COVID-19) fears and US-China tussles. At the coronavirus front, the 3rd-wave of coronavirus is getting more serious day by day in Europe, resulting in the fresh COVID-19-induced lockdowns in Europe which re-triggered fuel demand worries. As per the latest report, German Chancellor Angela Merkel said that the virus-led lockdown is needed, while French doctors said that the virus-infected people in the Intensive Care Unit (ICU) have surged to the highest in 2021. Not only Europe, but Australia’s 3rd-largest city by population declared a 3-day lockdown.

At the US-China front, China’s Xinjiang region Government Spokesman alleged the Western group to allies destabilize Beijing. This happened after the U.S. Trade Representative (USTR) Katherine Tai commented that no relief to China under the new government. Meanwhile, the U.S., the U.K., European Union (E.U.), and Canada have recently joined the rally to voice their grievances against China’s human rights violations in Xinjiang. At the same time, Tai refraining from any immediate tariff relief to China as she recently took office. This, in turn, was seen as a key factor that undermined the market sentiment.

At the USD front, the broad-based U.S. dollar managed to extend its overnight positive moves and remained well bids on the day amid quickening U.S. economic recovery and COVID-19 vaccine rollouts. Meanwhile, the concerns over a 3rd- COVID-19 wave in Europe and escalating tensions between the West and China triggered safe-haven demand and contributed to the greenback gains. However, the upticks in the U.S. dollar making commodities priced in the currency more expensive, which became the key factor that kept the crude oil prices under pressure. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose by 0.04% to 92.650 by 9:53 PM ET (1:53 AM GMT).

On the different page, the hopes of a U.S. $3.0 trillion infrastructure spending plan from U.S. President Joe Biden and his push for faster vaccinations help the market trading sentiment limit its deeper losses. Meanwhile, the U.S. has increased its vaccination target after meeting its 100-million-shots goal more than a month ahead of schedule, which also lends some support to the market. However, these positive headlines help the crude oil prices to limit their deeper losses, at least for the time being. In the absence of significant data/events on the day, the market traders will keep their eyes on the chatters concerning vaccinations and economic recovery. Meanwhile, the risk catalyst and the U.S. dollar moves will also be key to watch. Good luck!