Oil prices have edged-up supported by new hopes of US fiscal stimulus.
However, concerns over rising cases of Covid-19 infections hindering fuel demand could restrict further gains.
Brent crude LCOc1 futures rose by $0.11 to reach $42.41 a barrel while US West Texas Intermediate (WTI) crude futures were up by $0.13 to $40.35 a barrel, Reuters reported.
US President Donald Trump’s administration has proposed a new stimulus package worth $1.5tn to House Democrats.
OANDA Asia Pacific senior market analyst Jeffrey Halley was quoted by the news agency as stating: “Even if Trump does sign, it must still be approved and originated by the house. Still, it appears progress is being made with the Republicans at $1.5tn, and the Democrats at $2.2tn.
“The odds of a compromise have increased dramatically and this will be positive for markets.”
On 30 September, US Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi made progress on the coronavirus stimulus deal.
House Democrats postponed a vote on a $2.2tn ‘Democratic coronavirus plan’ to allow more time for bipartisan talks.
WTI futures rose after data from the industry group, the US Energy Information Administration (EIA), showed a fall in the crude and distillate inventories.
So far, the pandemic has infected more than 7.2 million and killed over 206,000 people in the US.
According to a Reuters survey, 40 analysts and economists now see global demand contracting by eight million barrels per day (Mbpd) to 9.8Mbpd this year versus an 8Mbpd-10Mbpd consensus last month.
The US crude price outlook this year stands at $38.70 a barrel versus $38.82 in August.