(Bloomberg) — Oil held near a one-week high on optimism for a fresh round of stimulus spending before the U.S. election, as demand concerns kept gains in check.
Futures in New York were little changed on Tuesday, after rising 0.9% Monday to their highest since Sept. 18. Oil markets drew some support overnight from U.S. stocks, which rallied after four weeks of declines. House Speaker Nancy Pelosi held out the prospect that a stimulus deal could still be done, even though she said that the White House will have to agree to “much more” spending.
This comes amid concerns over how the pandemic is affecting oil demand and signs of further uncertainty in the market as the Trump administration mulls new sanctions on Iran’s financial sector.
In the U.S., refiners are struggling to contain the output of fuels such as diesel, amid a pandemic-driven collapse in demand for transportation fuels. In major consuming markets such as India, refiners are being forced to import gasoline as reduced diesel consumption is forcing them to run their plants below capacity.
Supply concerns continue to weigh on the outlook for oil prices. JPMorgan (NYSE:JPM) analysts warned against adding oil to the market, as Libya production returns and the OPEC+ alliance looks to its next round of tapering output cuts.