Oil holds steady on hopes for U.S. stimulus agreement

By Sonali Paul
MELBOURNE, Oct 1 (Reuters) - Oil prices were little changed
in early trade on Thursday after U.S. lawmakers postponed a vote
on a $2.2 trillion coronavirus relief package in hopes of
reaching a bipartisan deal, while rising infections fuelled
demand fears.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
slipped 1 cent to $40.21 a barrel at 0146 GMT, after jumping
2.4% on Wednesday.
Brent crude LCOc1 futures rose 3 cents to $42.33 a barrel,
after falling 0.2% overnight.
U.S. Treasury Secretary Steven Mnuchin said talks with House
Speaker Nancy Pelosi made progress on COVID-19 relief
legislation. WTI jumped on Wednesday after data from the U.S. Energy
Information Administration showed crude stocks and distillate
inventories, which include diesel and jet fuel, fell more than
expected in the latest week. EIA/S But demand worries remain. Concerns are growing in New York,
where COVID-19 infection rates continued to climb. The pandemic
has infected more than 7.2 million and killed more than 206,000
people in the United States.
Growing supply from the Organization of the Petroleum
Exporting Countries (OPEC) also weighed on the market, with
output having risen by 160,000 barrels per day in September from
August as some Libyan installations restarted and Iran's exports
grew, a Reuters survey found. ANZ Research noted reports of Russia increasing production
beyond its quota within the grouping of OPEC and its allies,
called OPEC+, which has worked since April to curb crude supply.
"Increasing supplies from OPEC+ will be risking their
rebalancing effort as the market is still grappling with weak
demand," ANZ Research said.
In a Reuters survey, 40 analysts and economists now see
global demand contracting by 8 million-9.8 million bpd (barrels
per day) this year, slightly less bleak than the 8 million-10
million bpd consensus last month. However they trimmed their outlook for oil prices this year,
with the average of forecasts for benchmark Brent crude at
$42.48 a barrel for 2020 down from an average forecast of $42.75
last month.
The 2020 U.S. crude price outlook was at $38.70 per barrel
versus $38.82 predicted in August.