Oil higher on hopes for US stimulus, demand recovery

LONDON: Crude oil prices rose on Tuesday, underpinned by expectations of a US stimulus to help jumpstart the world's biggest oil consumer, a rebound in Asian demand as economies reopen and a stronger stock market.

Brent crude added 29 cents, or 0.6pc, to $45.28 a barrel, by 0819 GMT. West Texas Intermediate US crude rose 38 cents, or 0.9pc, to $42.32 a barrel.

US 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 deal on the support package is not a foregone conclusion but if it a mutually acceptable accord is struck stocks and oil will get a short-term boost," Tamas Varga of oil brokerage PVM said.

Signs of recovering Asian oil demand also boosted prices.

On Sunday, Aramco CEO Amin Nasser said he sees oil demand rebounding in Asia as economies gradually open up.

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.

Prices also found support from a rally in European stocks which rose for a third straight session on Tuesday as automakers gained on firm China sales data.

US passenger airline traffic, which was hit hard by the coronavirus pandemic, was down 80pc in June from a year earlier, official figures showed, but still nearly twice the levels of May.

Energy companies have begun taking back millions of barrels of oil from the US 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.