WTI struggles to extend the bounce above $41 mark

• Oil benefits from relentless dollar selling across the board.
• US-China escalation, US coronavirus surge weigh on market mood.  
• WTI set to rise for third straight month, eyes US weekly supply reports.

WTI (futures on Nymex) has bounced-off a dip below the 41 mark and remains on track to book the third straight monthly rise. The further upside, however, remains at the mercy of the broader market sentiment and the US supply-side scenario.

The latest uptick in the black gold can be mainly attributed to broad US dollar weakness, as the rise in the coronavirus cases in America continue to weigh on the economic rebound hopes. This, in turn, tempers the expectations of a recovery in the fuel demand, which keeps the gains limited in the barrel of WTI.

Also, the souring diplomatic ties between the US and China over the escalation over the latter’s retaliation over the Houston consulate closure also remains a drag on the higher-yielding oil.

Meanwhile, markets are focussed on gold trading, as the yellow metal nears record high in Asia this Monday. In the day ahead, the risk sentiment and the dollar dynamics will continue to play out, as the attention turns towards the US weekly crude supply reports for fresh trading impetus. Last week, the US stockpiles showed an unexpected build.

Also, any impact from storm Hanna, which battered the Texas coast over the weekend, will be closely eyed.

WTI technical levels to watch