UPDATE 8-Oil up 1% on economic hope; virus fears check price gains

* 'Relief rally' pushes equity markets higher
* Firming dollar helps prices
* Russian oil minister warns of resurgent COVID-19 risks
* Higher exports from Iran, Libya

(New throughout, updates prices, market activity and comments
to settlement)
By Laila Kearney
NEW YORK, Sept 28 (Reuters) - Oil prices rose 1% on Monday
as global equities rallied on hopes for another U.S. stimulus
package, but rising virus cases fed concerns about fuel demand
and kept oil futures from moving higher.
Brent crude LCOc1 settled at $42.43 a barrel, up 51 cents,
or 1.22%. U.S. West Texas Intermediate CLc1 settled at $40.60
a barrel, rising 35 cents, or 0.87%.
"In my opinion, the most likely event capable of moving the
crude oil market to the next level would be the passing of a
coronavirus stimulus package," said Bob Yawger, director of
energy futures at Mizuho.
Oil followed Wall Street higher as American political talks
continued for another COVID-19 relief bill after U.S. House
Speaker Nancy Pelosi on Sunday said she thought a deal could be
reached with the White House. A weaker U.S. dollar, which moves inversely with oil prices,
also helped crude futures. .DXY
Still, the global health crisis, which has slashed global
fuel consumption, kept oil prices from pushing much higher.
"The speed with which the virus is spreading is the main
concern for both health officials and financial investors," said
PVM analyst Tamas Varga.
Some Midwest U.S. states have seen a 25% jump in positive
COVID-19 test rates, and the number of new infections nationwide
has grown to 46,000 on average each day compared with 35,000
daily two weeks ago. Russian Energy Minister Alexander Novak said the global oil
market had been stable for the past few months, but warned of
the risks of a second wave of COVID-19 cases. Despite efforts by the Organization of the Petroleum
Exporting Countries and its allies to limit output, more crude
is being exported from OPEC producers Iran and Libya.

OPEC Secretary General Mohammad Barkindo said on Sunday that
commercial oil inventories in OECD countries should stand only
slightly above the five-year average in the first quarter of
2021, then fall for the rest of the year. Meanwhile, one of the heaviest clashes between Armenia and
Azerbaijan since 2016 broke out over the weekend, reigniting
concern about stability in the South Caucasus, a corridor for
pipelines carrying oil and gas to world markets.