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  • WTI trades off earlier lows and above the $45.50 level as traders eye pandemic and political developments.
  • Coming up at 21:30GMT, weekly API crude oil inventories could trigger a reaction ahead of Wednesday’s official EIA inventory report.

WTI bulls were there to support the price action earlier on during Tuesday’s session, keeping the American benchmark for sweet light crude supported ahead of the $45.00 level and then pushing it back above the $45.50 mark early on during the US session. However, on the day, WTI crude oil trades still trades with very marginal losses of about 10 cents or 0.2%.

WTI traders eye pandemic developments and broader risk appetite

Pandemic developments seemingly weighed on the crude oil complex early on during Tuesday’s session; news that German is mulling tighter lockdown restrictions as well of AstraZeneca facing Covid-19 manufacturing delays seemed to weigh on the complex early on. However, the crude oil complex recovered from lows into the US session seemingly in tandem with a US equities as the Covid-19 newsflow seemingly took a turn for the better; reports emerged that China’s SinoVac Covid-19 vaccine has efficacy of 97% in early trials.

Moreover, Pfizer’s CEO said he thinks the US FDA will vote to approve the Pfizer/BioNTech vaccine on Thursday and that the company is working on a new formulation that would avoid having to store the vaccine at -70 degrees Celsius. Additionally, AstraZeneca released its official Phase III results for its Covid-19 vaccine, which confirmed average efficacy of 70.4% shown by early data (62% efficacy in those given two doses and 90% for those given a half dose and then a full dose).

Looking ahead, pandemic-related developments look set to continue to influence crude oil market price action for the remainder of the week, although the complex is also likely to be influenced by political events in the US and Europe (US fiscal stimulus talks, EU Summit and Brexit) in so far as these events affect the market’s broader appetite for risk.

In terms of crude oil specific developments, things have been light thus far on Tuesday, but weekly API private inventories are set for release at 21:30GMT and, as ever, could trigger a reaction ahead of Wednesday’s official EIA inventories data.