Oil Steadies But Outlook is Bleak

Oil prices rose on Tuesday after recent sharp losses, but market sentiment remains weak as high COVID-19 cases hurt the outlook for fuel demand while supplies rise.

And Brent crude rose 42 cents, or the equivalent of 1%, to 40.88 dollars a barrel. U.S. crude gained 37 cents, or 1%, to $ 38.93 a barrel. The two benchmarks fell more than 3% on Monday.

The lack of progress on agreeing on a package to mitigate the repercussions of the Coronavirus in the United States has been added to the gloomy atmosphere in the market, although Nancy Pelosi, Speaker of the US House of Representatives, said on Monday that she hopes that an agreement can be reached before the presidential elections on November 3.

A wave of coronavirus infections is sweeping across the United States, Russia, France and many other countries, undermining global economic expectations, with record numbers of new cases forcing some countries to impose new restrictions as winter approaches.

Prices received some support from a possible drop in US production as oil companies began closing offshore platforms as a hurricane approached the Gulf of Mexico.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday that the worst was over for the crude market.

But his statements contradicted earlier comments made by the Secretary-General of OPEC, who said that any recovery of the oil market may take longer than he hopes, with the increase in Corona virus infections around the world.

The National Oil Corporation of Libya said on Friday that the country’s production is expected to reach 1 million barrels per day in the coming weeks, in a faster return than many analysts had expected, hampering OPEC’s efforts to restrict production.