Oil prices were steady on Tuesday, with demand worries due to a rise in coronavirus cases worldwide undermining support coming from hopes for additional U.S. economic stimulus measures.
Brent crude was up 7 cents, or 0.2%, at $43.48 a barrel at 1052 GMT, while West Texas Intermediate (WTI) U.S. crude fell 19 cents, or 0.5%, to $41.41 a barrel.
“Oil continues to trade in a range with its supply fundamentals helping to set a floor while the economic and demand outlook is providing the cap,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.
A big U.S. fiscal package that could boost oil prices was deadlocked in talks between Democrats who made a $3 trillion proposal and Republicans who have a $1 trillion plan.
Traders are also before the U.S. Federal Reserve’s policy-setting panel meeting on Tuesday and Wednesday. The panel is expected to reiterate that interest rates will remain near zero for years to come.
Brent crude was deeper in contango, a market structure in which the future price of the commodity is higher than the spot price, encouraging a build up of inventories.
September prices were as much as 49 cents per barrel below October, compared to 1 cent in early July.
“This suggests that the tightening we were seeing in the market has eased somewhat, with the demand outlook more uncertain given the resurgence of COVID-19 cases in some regions,” said Warren Patterson, ING’s head of commodities strategy.
U.S. inventory data may show refined product stockpiles declined last week, while crude oil stockpiles are expected to have held steady, five analysts polled by Reuters estimated.
On the down side for fuel demand, Europe’s largest low-cost airline Ryanair cut its annual passenger target on Monday by a quarter and warned that a resurgence in coronavirus infections could lower that further.