During Friday’s Asian trading session, the WTI Crude Oil prices flashed green, taking bids above the 42.00 level. However, the reason for the ongoing bullish bias in crude oil could be attributed to the reports of the growing investor confidence in the general recovery of the fuel demand. The data from the US Energy Information Administration (EIA) and the American Petroleum Institute (API) during the week showed draws in US crude oil supplies. 

On the other hand, the risk-on market sentiment, backed by the upbeat US Jobs data and US President Donald Trump’s optimism about the US economy, also exerted a bullish impact on oil prices. In the meantime, the weakness of the broad-based US dollar, triggered by the upbeat market mood and uncertainty over the coronavirus stimulus package, also impressed oil bulls and kept the oil prices bullish. Across the pond, the uncertainty surrounding the US-China trade relations and the coronavirus crisis became a key factor that capped further rises in oil prices. At the time of writing, WTI Crude Oil is currently trading at 41.72 and consolidating between 41.23 and 41.87.

As we all know, the positive tone surrounding the global equity markets undermined demand for the safe-haven US dollar and extended some support to the oil prices. However, the risk-on market sentiment was supported by the latest upbeat American job data, which showed that the US economy was starting to recover from the COVID-19 crisis. On the data front, the US reported 963,000 initial jobless claims for the past week, coming in lower than the 1.1 million that was forecast. This data initially gave support to the broad-based US dollar and the market trading sentiment.

Trump’s signing of four executive orders also supported the market trading tone during the previous week, with regard to the COVID-19 economic aid. It is worth recalling that, last week, Trump signed four executive orders related to COVID-19 economic aid, unemployment benefits, a temporary payroll tax deferral, eviction protections and student-loan relief. 

Ahead of the world’s top two nations meeting up at the weekend, to restart the deadlocked Phase 1 deal talks, White House Adviser Larry Kudlow praised China’s purchase of US agricultural products, and this also lent support to the risk-on market sentiment.

On the contrary, the uncertainty surrounding the US-China trade relations and the much-awaited coronavirus (COVID-19) relief package from America became the key factor that capped a further upside in the equity market. The leaders of the US Democratic Party are still unable to settle their differences regarding the coronavirus relief package figures. For now, all eyes will remain on the US retail sales data, as positive figures here could support the oil demand, and its prices could eventually show us a bullish trend. Good luck!