Oil Sees Challenges amid Crumbling Optimism

WikiFX News (8 Dec.) - WTI crude on Monday ended lower 0.78%. It is now consolidating below 46.0 after a decline for the second straight day. Oil prices will face short-term challenges amid market uncertainties.

The weak Non-Farm Payroll that was released recently has triggered more concerns on the US economy. Besides, as the pandemic is still raging the US and Europe, “the middle of January could be a really dark time for us,” said Anthony Fauci, US epidemiologist.

The US House of Representatives plans to vote on Wednesday on a stopgap funding bill to keep the federal government open. However, if Congress fails to pass the bill, the federal government will shut down again this weekend.

In terms of Brexit talks, differences remain on essential points such as fisheries. It is increasingly unlikely that an agreement can be reached before the deadline of Dec. 10 as odds of a no-trade deal exit has risen to 50%.

Investors tend to be prudent in the short term since market optimism will receive challenges this week. Currently, WTI finds resistance at 46.0, a position where early gains will push prices into swing highs. In the short term, the area of 43.60-44.0 will be thrust into the spotlight.

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Chart: Trend of Oil Prices