SULAIMANI (ESTA) — Oil prices rose on Tuesday, but sentiment remained subdued as a surge in global coronavirus cases hit prospects for crude demand while supply is rising.
Brent crude LCOc1 was up 35 cents, or 0.87%, at $40.81 a barrel by 0638 GMT. U.S. oil CLc1 gained 32 cents, or 0.83%, at $38.88 a barrel.
A lack of progress on agreeing a U.S. coronavirus relief package added to market gloom, although U.S. House of Representatives Speaker Nancy Pelosi said on Monday that she hoped a deal can be reached before the Nov. 3 elections.
A wave of coronavirus infections sweeping across the United States, Russia, France and many other countries has undermined the global economic outlook, with record numbers of new cases forcing some countries to impose fresh restrictions as winter looms.
“We think demand from this point onwards is really going to struggle to grow. COVID-19 restrictions are all part of that,” said Commonwealth Bank of Australia (CBA) commodities analyst Vivek Dhar.
CBA expects U.S. oil to average $38 and Brent to average $41 in the fourth quarter this year.
Prices got some support from a potential drop in U.S. production as oil companies began shutting offshore rigs with the approach of a hurricane in the Gulf of Mexico.
