WTI crude oil is holding steady in early trading on Friday, bouncing back from the lowest levels seen in three months; however, it continues to remain under pressure as traders worry about the impact of the rising number of COVID-19 cases across the world on oil demand. At the time of writing, WTI crude oil is trading at around $63.47 per barrel.

So far this week, US oil prices are down by around 6% as more countries report an uptick in coronavirus cases, raising the likelihood of more restrictions being imposed. The increase in restrictions could have an adverse impact on the outlook for oil demand and keep prices under pressure as a result.

In addition, oil markets are also being affected by the risk-off sentiment in global financial markets due to the latest spike in infections worldwide. The risk averse mood among investors has strengthened the US dollar’s safe haven appeal, making crude oil more expensive for holders of other currencies and hurting its demand in turn.

During the previous session, crude oil had fallen to the lowest levels seen since May after China imposed fresh restrictions to combat the spread of infections. As the world’s second largest energy consumer, China’s latest restrictions have hurt shipping as well as flight travel, further denting the demand for oil.