Oil prices rose 1% on Monday as global stocks soared on expectations of another US stimulus package. However, concerns about demand, created by increased virus cases, suppressed the price and prevented oil futures from rising.
Brent crude LCOc1 settled at $42.43 a barrel, up 51 cents, or 1.22%. West Texas Intermediate (WTI) crude oil CLc1 settled at $40.60 a barrel, rising 35 cents, or 0.87%.
It is very likely that a US stimulus package may take the crude oil market to the next level. The discourse and expectations on this matter are very promising. Moving in the opposite direction with oil prices, the weak US dollar also helped crude oil futures.
The health crisis, which reduced global fuel consumption, prevented oil prices from rising higher. The speed at which the virus spreads is a major concern for both healthcare professionals and financial investors. Some Midwestern US states have seen a 25% jump in positive COVID-19 testing rates.
Despite efforts by the Organization of Petroleum Exporting Countries and its allies to limit production, OPEC’s producers Iran and Libya are exporting more crude oil.
Meanwhile, one of the most violent conflicts between Armenia and Azerbaijan since 2016 broke out this weekend, and stability concerns were revived in the South Caucasus, a corridor for pipelines transporting oil and gas to world markets.