Oil prices soared on Thursday with the prospect of a United States economic stimulus package. However, as US gasoline stocks and the rise of coronavirus cases signaled a worsening demand outlook, it struggled to fully recover from the losses of the previous session.
Brent crude futures settled 73 cents higher at $42.46 a barrel and West Texas Intermediate (WTI) crude futures gained 61 cents to $40.64.
Both crude contracts shed more than 3% on Wednesday in their steepest daily falls in three weeks.
Futures gained momentum early Thursday, as the White House and Democrats were said to be positive about the economic stimulus package and strong expectations that demand would improve.
While the prospect of more fiscal stimulus to support a pandemic-damaged US economy cheered investors, slowed recovery in the labor data market is not so pleasant. Stocks on Wall Street rose in volatile trading on Thursday.
US gasoline stocks increased by 1.9 million barrels last week, compared with the expected decline of 1.8 million barrels last week, a statement released Wednesday said. Representing demand, the total product supplied is said to be 18.3 million barrels per day on average in four weeks, down 13% compared to the same period of the previous year.
In addition to the new daily increasing numbers of COVID-19 infections in several US states and Europe, further coronavirus restrictions, delayed stimulus package and China’s pressure on overseas travel negatively affect fuel demand.
In addition to supply concerns, Libyan oil exports accelerated rapidly in October. Libyan production increased by about 500,000 barrels a day, and the Tripoli government expects that to double by the end of the year.