UPDATE 5-Oil falls as U.S. fiscal package faces tough talks

* Rising coronavirus infections spark demand worries
* U.S. stimulus package stuck in political deadlock
* Brent crude price contango deepens

(Updates prices)
By Bozorgmehr Sharafedin
LONDON, July 28 (Reuters) - Oil prices fell on Tuesday, as
U.S. lawmakers prepared to wrangle over an economic stimulus
package and investors worried about a rise in coronavirus cases
worldwide.
Brent crude LCOc1 was down 4 cents, or 0.1%, at $43.37 a
barrel at 1331 GMT, while West Texas Intermediate (WTI) U.S.
crude CLc1 fell 36 cents, or 0.9%, to $41.24 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.
U.S. Republicans and Democrats faced difficult talks on
Tuesday on how best to recover from the coronavirus pandemic,
after Republicans unveiled a relief proposal four days before
millions of Americans lose unemployment benefits. Investors also awaited the outcome of 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 LCOc1-LCOc2 , a market
structure in which the future price of the commodity is higher
than the spot price, encouraging a build up of inventories.
October prices as much as 49 cents per barrel above
September levels, compared to a 1 cent difference 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 downside 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.