Crude oil gained more ground on Tuesday, with prices underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. REUTERS/Angus MordantBrent crude LCOc1 added 7 cents, or 0.2%, to $45.06 a barrel, as of 0027 GMT. West Texas Intermediate U.S. crude CLc1 rose 14 cents, or 0.3%, to $42.08 a barrel.
“Crude oil gained amid signs of further stimulus measures,” ANZ said in a note.
“U.S. lawmakers continued negotiations on the massive virus relief economic package with Treasury Secretary Steven Mnuchin saying there are areas where compromise is possible and a fair deal could be agreed upon. Sentiment was also boosted by comments from Saudi Aramco that demand is improving.”
Prices found support after U.S. President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief.
The talks between Democrats and the Trump administration broke down last week.
On Sunday, Saudi Arabian Aramco CEO Amin Nasser said he sees oil demand rebounding in Asia as economies gradually open up.
China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy.
Iraq said on Friday it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months.
The move would help it comply with its share of cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.
Energy companies have begun taking back millions of barrels of oil from the U.S. government’s emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns, a Department of Energy website showed on Monday.