On Thursday, oil prices edged up on the back of the optimism about the US economic stimulus package, although still struggled to fully recover from the previous session’s losses.
Brent crude oil futures were closed up by 73 cents to USD42.46/barrel and the US WTI crude futures climbed by 61 cents to USD40.64/barrel.
According to economist Bob Yawger of Mizuho, prices were propped up by the hopes of a US economic stimulus package as a deal was closer to be reached, spurring predictions that demand would improve.
On the previous day, both benchmarks lost more than 3% on the sharpest daily loss in three weeks.
The Wall Street shares also rose yesterday, as investors went optimistic about more fiscal stimulus in the US economy as more data showed a slowing recovery in the labor market.
On a related note, US gasoline inventories jumped by 1.9 million barrels in the week ended October 16, said the Energy Information Administration (EIA). Overall product supplied in the four weeks to last week slipped by 13% year-on-year.
Looking ahead, the fuel demand outlook is still gloomy with record new daily coronavirus infection cases in some US states and in Europe, further lockdowns, and China’s crackdown on outbound travel.
From the supply side, the additional oil supply from Libya has been accelerating rapidly this month after the blockade of the country’s oil facilities. At the moment, its output has recovered to roughly 500,000 bpd, with Tripoli expecting the number to double by end-2020.
