Oil holds steady on hopes for U.S. stimulus agreement

In this news, we discuss the Oil holds steady on hopes for U.S. stimulus agreement.

MELBOURNE (Reuters) – Oil prices were little changed in early trade Thursday after U.S. lawmakers postponed voting on a $ 2.2 trillion coronavirus relief package in hopes of achieving a bipartisan agreement, while the rise in infections has fueled demand fears.

US West Texas Intermediate (WTI) crude CLc1 futures slipped 1 cent to $ 40.21 a barrel at 0146 GMT, after jumping 2.4% on Wednesday.

Brent LCOc1 futures rose 3 cents to $ 42.33 a barrel, after falling 0.2% overnight.

US Treasury Secretary Steven Mnuchin said discussions with House Speaker Nancy Pelosi made progress on relief legislation against COVID-19.

WTI surged on Wednesday after data from the US Energy Information Administration showed inventories of crude and distillate, which include diesel and jet fuel, fell more than expected in the past week.

But concerns about demand remain. Concerns are growing in New York City, where rates of COVID-19 infection have continued to rise. The pandemic has infected more than 7.2 million people and killed more than 206,000 people in the United States.

Growing supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with production increasing by 160,000 barrels per day in September from August, with some Libyan facilities restarting and Iranian exports increasing. , according to a Reuters investigation.

ANZ Research has noted reports that Russia is increasing production beyond its quota within the grouping of OPEC and its allies, called OPEC +, which has been working since April to reduce the supply of crude.

“Increasing supplies to OPEC + will jeopardize their rebalancing effort as the market continues to struggle with weak demand,” ANZ Research said.

In a Reuters survey, 40 analysts and economists now see global demand contracting from 8 to 9.8 million b / d (barrels per day) this year, somewhat less gloomy than the consensus of 8 to 10 million b / d last month.

However, they lowered their outlook for oil prices this year, averaging the forecast for benchmark Brent crude at $ 42.48 per barrel for 2020, down from an average forecast of $ 42.75 per month. latest.

The U.S. crude price outlook for 2020 was $ 38.70 per barrel versus $ 38.82 predicted in August.

Reporting by Sonali Paul; edited by Richard Pullin

Original © Thomson Reuters

Originally posted 2020-10-01 05:26:11.

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