Despite lingering concerns about outlook for energy demand due to surging coronavirus cases and tightening of lockdown measures in several parts across the world, crude oil futures came off the session’s lows to end notably higher on Tuesday.
Expectations of a drop in U.S. crude inventories in the week ended October 18 and optimism about a stimulus sometime soon helped pull prices out of the red.
Prospects of OPEC and its allied scaling back production helped as well.
West Texas Intermediate Crude oil futures for December ended up $0.64 or about 1.6% at $41.70 a barrel.
WTI crude oil futures for November expired at $41.46 a barrel, gaining $0.63% or about 1.5% in the session.
Brent crude futures advanced by about $0.20 to $42.81 a barrel.
Due to tightening of lockdown restrictions at many places across the world, it is feared energy demand will see a notable drop in the near term.
OPEC said on Monday it would adapt to changing circumstances should the need arise.
For now, OPEC and its allies are reportedly planning to further scale back production from January 1 to 5.8 million barrels per day from the existing 7.7 million barrels per day.
Meanwhile, Libya, which is exempt from the cuts, is rapidly ramping up production after armed conflict shut almost all of the country’s output in January.
On the stimulus front, House Speaker Nancy Pelosi said in an interview with Bloomberg TV on Tuesday she was optimistic Democrats could reach a deal with the Trump administration and aid could go out by early next month.
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