U.S. Oil Climbs to Highest in Almost a Week on Stimulus Hopes

Oil gained as optimism that Congress may resume talks over another round of economic stimulus provided a glimmer of hope for an otherwise dreary demand outlook. Futures in New York advanced 1% on Thursday to the highest in nearly a week after earlier flipping between gains and losses in tandem with stocks. House Speaker Nancy Pelosi said she spoke with Treasury Secretary Steven Mnuchin, signaling openness to resuming stimulus talks.

“Prospects of any kind of stimulus deal would be a big positive for energy,” said Josh Graves, senior market strategist at RJ O’Brien & Associates LLC.

WTI trades in a tight range this week following last week's rally

The coronavirus pandemic has showed signs of a resurgence and investors are also concerned over returning OPEC+ supply and production from Libya as its civil war abates. A possible collapse in the OPEC+ deal is the biggest downside price risk to the oil market, Standard Chartered analyst Emily Ashford said during a Bloomberg-hosted panel discussion.

“We will continue to see a pricing regime for oil in the short-term that is characteristic of this summer,” said Harry Tchilinguirian, head of commodity research at BNP Paribas SA in London. “Moving essentially sideways, but buffeted by shifts in risk sentiment, while waiting for that elusive catalyst to break out.”

PRICES
West Texas Intermediate for November delivery rose 38 cents to settle at $40.31 a barrel Brent for November settlement edged 17 cents higher to end the session at $41.94 a barrel

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