Categories: Market Overview

The reasons behind oil growth

Crude oil gained more ground on Tuesday, with prices underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen. Brent crude added 22 cents, or 0.5%, to $45.21 a barrel, as of 0441 GMT. West Texas Intermediate U.S. crude rose 32 cents, or 0.8%, to $42.26 a barrel.

Prices found support after U.S. President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief. The talks between Democrats and the Trump administration broke down last week. A weaker U.S. dollar also helped support higher oil prices, said Energy Aspects analyst Virendra Chauhan.

China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy. Energy companies have begun taking back millions of barrels of oil from the U.S. government’s emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns, a Department of Energy website showed on Monday.

Oil edges higher on hopes for U.S. stimulus, demand recovery, Reuters, Aug 11

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