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  • Front-month WTI crude oil futures have swung back beneath the $46.00 level and back towards $45.00 having been as high as $46.50.
  • Crude oil specific newsflow was light on Monday, thus the complex took its queue from other assets/themes.

WTI crude oil futures rallied as high as the $46.50 level midway through the US session on Monday, but the gains were short-lived and the American benchmark for sweet light crude has since fallen back below $46.00 and is eyeing a retest of the $45.50 level. Front-month futures closed Monday trade at 22:00GMT with losses of around 60 cents, or 1.4%.

WTI eyes fundamental drivers ahead

With OPEC+ out of the way (the cartel agreed to gradually ease current production cuts from January, starting by bringing 500K in daily production back online in January), WTI focus is now returning to the demand side of the equation, and will likely trade mostly as a function of risk appetite this week. That implies that the themes of 1) US fiscal stimulus, 2) central banks (the ECB and BoC meet) as well as any potential further vaccine or pandemic updates (will the FDA approve the Pfizer/BioNTech vaccine on Thursday). Brexit might also be of interest, insofar as how a complete breakdown (not the base case for most analysts) in talks could trigger a broader risk-off move in markets.

Aside from these themes, weekly inventory data will also be of note, starting with private API inventories on Tuesday at 21:30GMT followed by official EIA inventories on Wednesday at 15:30GMT.