Oil Price Fundamental Daily Forecast – Supported as Supply Side Issues Move to ForefrontThe crude oil market is being beset by supply concerns due to a spreading labor strike in Norway and the evacuation of oil platforms in the Gulf.
U.S. West Texas Intermediate and international-benchmark Brent crude oil are edging higher on Tuesday after jumping more than 5% the previous session after U.S. President Donald Trump returned to the White House following a brief hospital stay due to the coronavirus.
Growing hopes for an agreement on a U.S. stimulus package are also helping to underpin prices as a means to counter the impact of the pandemic. Finally, growing fears that refineries could be hit by a storm brewing in the Gulf of Mexico also supported prices.
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Trump’s Return to White House Helps Erase Friday’s Losses
President Donald Trump’s return to the White House is helping to generate support prices on Tuesday, continuing the trend from Monday. Oil prices had fallen sharply when Trump went to the hospital on Friday, as investors were filled with uncertainty over what would happen in the Unites States as the country gears up for a presidential election on November 3.
Trader Optimism Over Stimulus Deal Underpinning Prices
Hopes for a bipartisan U.S. economic relief package grew as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on Monday and prepared to talk again Tuesday, in a concerted effort to reach a compromise on legislation.
Supply Side Factor Contributing to Rally
At the start of the week, the crude oil market is being beset by supply concerns due to a spreading labor strike in Norway, which has shut six offshore oil and gas fields, and the evacuation of oil platforms in the Gulf, with Tropical Storm Delta heading toward the Louisiana and Florida coast.
Data from the American Petroleum Institute (API) at 20:30 GMT on Tuesday and the U.S. government on Wednesday will provide a picture of whether demand is picking up.
Five analysts polled by Reuters estimate, on average, that crude stocks rose by 400,000 barrels in the week to October 2, while gasoline inventories likely fell by 900,000 barrels and distillate stockpiles, which include diesel and heating oil, likely dropped by 1.4 million barrels.
For a look at all of today’s economic events, check out our economic calendar.