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.”
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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.