Rejection of Trump's Aid Bill & Pressure on WTI

WikiFX News (12 Oct.) - Recently, Trump's 1.8 trillion stimulus bill was rejected again, dampening the risk sentiment soaring in the market. Besides, the global oil demand can hardly recover in the short term amid the pandemic, which again presses WTI crude oil to accept a downtrend.

House Speaker Pelosi once again vetoed the 1.8 trillion stimulus bill offered by the Treasury Secretary Mnuchin because the proposal lacks “a strategic plan to contain the spread of the virus” and has inadequate aid funding. The market seems to be convinced that the two parties do not intend to reach any stimulus bill before the end of the election, which may dampen the lately soaring risk-on tilts.

Moreover, the second wave of the pandemic in Europe and the US has significantly impacted the demand for crude oil. Global oil demand may not recover until the end of 2023, according to the Federal Reserve Bank of Kansas City.

WTI is currently consolidating in a range with the above resistance lying at $ 41.30. Although oil prices are expected to challenge the $42.0 and $43.0 levels by a rebound in the near term, they are still hard to see a reversal in the downward momentum unless effectively breaking the resistance near the previous high of $44.0.

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Chart: Trend of Oil Prices