LONDON: Oil prices were steady on Tuesday as hopes for additional US measures to stimulate the economy countered a demand outlook dampened by rising of coronavirus cases across the globe.
Brent crude was up 7 cents, or 0.2%, at US$43.48 a barrel at 0811 GMT, while West Texas Intermediate (WTI) US crude fell 11 cents, or 0.3%, to US$41.49.
“Oil continues to trade in a range with its supply fundamentals helping to set a floor while the economic and demand outlook is providing the cap,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.
A big US fiscal package could boost oil prices but is currently deadlocked in negotiations between Democrats who have made a US$3 tril (RM12.76 tril) proposal and Republicans who have tabled a US$1 tril plan.
Traders are also watching out as the US Federal Reserve’s policy-setting panel meets on Tuesday and Wednesday, where it is expected to reiterate it will keep interest rates near zero for years to come.
Brent crude was deeper in contango at as much as 49 cents per barrel between prices for September and October, compared to 1 cent in early July.
Contango is where the futures price of a commodity is higher than the spot price.
“This suggests that the tightening we were seeing in the market has eased somewhat, with the demand outlook more uncertain given the resurgence of Covid-19 cases in some regions,” said ING’s head of commodities strategy, Warren Patterson.
US inventory data may show that refined product stockpiles declined last week, while crude oil stockpiles are expected to have held steady, five analysts polled estimated.
On the downside for fuel demand, Europe’s largest low-cost airline, Ryanair, on Monday cut its annual passenger target by a quarter and warned that a resurgence in Covid-19 infections could lower that further. – July 28, 2020, Reuters
