Crude oil rose further on Tuesday, with prices supported by optimism surrounding U.S. stimulus and a recovery in Asian demand as economies restart.
Brent crude was up by 34 cents or 0.76%, trading $45.33 a barrel at 08:43 West Africa Time while its U.S. counterpart benchmark, West Texas Intermediate (WTI) crude, inched up by 52 cents or 1.24% to $42.46.
At the Monday session, Bonny Light, Nigeria’s premium crude grade, bucked the generally positive market trend to fall by 93 cents or 2.03% to $44.82 per barrel. Qua Iboe, another major national oil grade, dropped by 42 cents or 0.92% to $45.14.
‘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 help following President Donald Trump’s tweet that top congressional Democrats planned to hold talks with him over coronavirus-related economic succour.
Last week, the talks between Democrats and the Trump administration collapsed.
Virenda Chauhan, Energy Aspects analyst, said a weaker dollar also bolstered higher oil prices.
After stabilising on Monday, the dollar was again falling on Tuesday, easing 0.1% against a basket of currencies, further depreciating against riskier currencies like the Australian dollar.
Air passenger traffic in the U.S., which had been battered by the pandemic outbreak, tumbled by 80% in June from a year before, according to official figures, but still roughly double the levels of May.
Saudi Arabian Aramco’s chief, Amin Nasser, said Sunday he envisaged oil demand rebounding in Asia as economies increasing reopen.
China’s factory deflation slid in July, spurred by a spike in global oil prices and as industrial operations climbed back towards pre-pandemic levels, boosting signs of a rally in the world’s second biggest economy.
Energy firms have started taking back millions of oil barrels from the U.S. emergency inventory after renting storage in the facility to help manage a surfeit of crude this spring following slump in energy demand during the coronavirus lockdowns, a Department of Energy website revealed Monday.
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