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  • WTI oil prices fall to the lowest since late-May. 
  • Coronavirus concerns, the US political and fiscal uncertainty weigh over risk assets. 

The West Texas Intermediate (WTI) crude fell to five-month lows on Monday on concerns demand conditions are about to weaken with many economies reimposing lockdown restrictions to contain the second wave of the coronavirus. 

The North American oil benchmark fell to $33.64, the lowest level since May 29, early Monday, and was last seen trading at $34.42, representing a 3.8% decline on the day. 

Global coronavirus cases surpassed 500,000 last week with Europe crossing the milestone of 10 million total infections. In response, the Eurozone’s major economies such as Germany and France imposed the economically-painful lockdowns, which are to remain valid at least for a month.  The United Kingdom, too, is grappling with more than 20,000 new cases a day while a record surge of US cases is killing up to 1,000 people a day, according to Reuters. 

Apart from virus concerns, prospects of a tightly contested US presidential election and absence of a pre-election US fiscal stimulus look to be weighing over risk assets and oil prices. 

Looking forward, prolonged lockdowns would begin filling up with the offshore and onshore storage tanks, leading to a price crash seen in April, when the then front-month futures contract had dropped below zero. 

Besides, Iranian oil supplies could flood the market if the Democratic presidential candidate Joe Biden wins elections and eases sanctions imposed by President Donald Trump. That would add to bearish pressures around the black gold.

Technical levels