Oil prices soared on Tuesday after recent sharp losses, but the market is worried as global COVID-19 cases are rising, and demand for crude oil distorts outlook while supply rises
Brent crude LCOc1 was up 33 cents, or 0.8%, at $40.79 a barrel by 0751 GMT. WTI oil CLc1 gained 28 cents, or 0.7%, to $38.84 a barrel.
Both benchmarks fell more than 3% on Monday.
There were rumors on Monday about the prospect of reaching an agreement on accepting the US coronavirus aid package before the November 3 elections.
The wave of new coronavirus infections that has swept across the United States, Russia, France and many other countries has weakened the global economic outlook, with a record number of new cases forcing some countries to impose new restrictions during the winter season.
According to some analysts, she expects US oil to average $ 38 and Brent an average of $ 41 in the last quarter of this year.
Meanwhile, another impending hurricane is causing oil producers in the Seta Gulf of Mexico to withdraw their platform workers. As the offshore platforms begin to close, prices are bolstered by the potential decline of the US oil supply.
Saudi Arabia says the worst is over for the crude oil market on Monday. But this interpretation does not allay the concern that the rise in coronavirus infections worldwide, an oil market recovery could take longer than hoped.
This dynamic will likely affect oil prices for the remainder of 2020, and will put pressure on OPEC and its allies to reduce oversupply in order to keep Brent above $ 40 a barrel next year.
Libyan production, which disrupts the production restriction balances, is suppressing fuel prices by making a return in supply faster than many analysts anticipate. It seems unlikely, that the increase in production by 2 million barrels from the beginning of 2021, as requested by OPEC and its allies, including Russia.
In addition to all the downsides, a survey conducted on Wednesday estimated that US crude oil stocks rose in the week of October 23, while stocks of gasoline and distillate fell.