WTI drops sharply in the open, busting down through $39

• WTI drops to below $39 and steadies as the coronavirus wave fears sweep through.
• Demand recovery still on a weak footing ahead of key events coming up.

West Texas Intermediate has fallen in the open, down some 1.6% at the time of writing having dropped from a high of $39.72 to a low of $38.91.

Markets are jittery as we approach November 3rd US election Day and while the coronavirus risks have increased drastically in recent times.

There are also key events on the economic calendar for the days ahead, including the European Central Bank, US Gross Domestic product as well as US jobs data. 

Despite the recent news of an FDA approval for remdesivir that gave a hint of positive news as do the prospects of the Johnson Johnson trials getting back on track, the sheer pace for which the second wave has swelled is critical for demand-side risk in the energy markets.

European nations are reporting record numbers of new coronavirus cases from this weekend as the continent prepares for the pandemic to intensify through winter.

The wave is forcing countries to impose ever-more social-distancing rules in a bid to avoid a return to full-blown lockdowns.

Spain has announced a national state of emergency and has imposed a night-time curfew in an effort to help control a new surge in infections.

In Italy, new restrictions were also announced over the weekend.

There have also been reports that a number of US Vice President Pence's inner circle of advisers and aides have tested positive for coronavirus.

Meanwhile, there is a focus on OPEC and expectations of a delay to the tapering of the production cuts. 

''With the demand recovery still on a weak footing and increasing supply from Libya amid a "permanent ceasefire", it is becoming crucial that OPEC+ delay their scheduled production increases as a failure to do so would endanger a fragile rebalancing amid a continued second wave,'' analysts at TD Securities explained.

WTI levels