Oil is climbing but the outlook is bleak as coronavirus infections soar and supplies grow

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Oil prices rose today, Tuesday, after recent sharp losses, but market sentiment remains weak, as high COVID-19 infections damage the prospects for fuel demand while supplies rise.

Brent crude rose 42 cents, or 1 percent, to $ 40.88 a barrel. U.S. crude gained 37 cents, or 1 percent, to $ 38.93 a barrel. The two benchmarks fell more than 3 percent on Monday.

The lack of progress on agreeing on a package to mitigate the repercussions of the Corona virus in the United States was added to the gloomy atmosphere in the market, although Nancy Pelosi, Speaker of the US House of Representatives, said on Monday that she hopes that an agreement can be reached before the presidential elections on the third of November.

A wave of coronavirus infections is sweeping across the United States, Russia, France and many other countries, undermining global economic prospects, with record numbers of new cases forcing some countries to impose new restrictions as winter approaches.

“We believe demand from now on will really struggle to grow. The COVID-19 restrictions are all part of that,” said Vivek Dahar, commodities analyst at the Commonwealth Bank of Australia.

The bank expects US oil to average $ 38 and Brent to $ 41 in the fourth quarter of this year.

Prices received some support from a possible drop in US production as oil companies began closing offshore platforms as a hurricane approached the Gulf of Mexico.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday that the worst was over for the crude market.

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