Oil gains on U.S. stimulus hopes and demand recovery

PUBLISHED: Tue, 11 Aug 2020 20:13:59 GMT

NEW YORK (Reuters) – Crude prices rose on Tuesday, underpinned by expectations of U.S. economic stimulus to support the world’s biggest oil consumer as well as a rebound in Asian demand as economies pick up

Brent crude LCOc1 futures rose 22 cents to $45.21 a barrel by (1543 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 32 cents to $42.26 a barrel.

On Monday, U.S. President Donald Trump tweeted that top congressional Democrats want to meet him to discuss coronavirus-related economic relief after talks broke down last week.

WASHINGTON, DC – FEBRUARY 16: U.S. President Donald Trump stands during a news conference announcing Alexander Acosta as the new Labor Secretary nominee in the East Room at the White House on February 16, 2017 in Washington, DC. The announcement comes a day after Andrew Puzder withdrew his nomination. (Photo by Mario Tama/Getty Images)

“Talks of coronavirus-related economic relief in the U.S. help boost confidence among oil and gas firms, that have so far lacked the funds to invest this year, or were simply avoiding the risk in a depressed market,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

Signs of recovering Asian oil demand also boosted prices.

On Sunday, Saudi Aramco CEO Amin Nasser said he expects oil demand to rebound in Asia as economies 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.

Prices also found support from a rally in European stocks, which rose for a third straight session on Tuesday as automakers gained on firm Chinese sales data.

Meanwhile, European refinery crude intake in July rose 3.3% from June, Euroilstock data showed on Tuesday.

U.S. passenger airline traffic, which was slammed by the pandemic, was down 80% year on year in June, official figures showed, but was still nearly twice the levels in May.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.