Oil closes higher due to US stimulus package
Economy News - Baghdad
Crude oil prices closed higher on Wednesday, supported by progress in an impending massive US economic stimulus package, even after government data showed that the Corona virus pandemic began undermining US fuel demand last week.
Demand for oil products, especially aviation fuel, is falling sharply as governments around the world announce public closings to stem the spread of Corona.
It is expected that the demand for fuel will decrease sharply around the world in the second quarter of the year in light of the almost complete cessation of air traffic and severe restrictions on road travel. Finally, India, the second most populous country and the third largest consumer of oil, entered into a general closure lasting 21 days.
The supply of U.S. gasoline products - an indication of demand - fell 859,000 bpd to 8.8 million bpd last week, in the biggest weekly drop since September 2019, according to the U.S. Energy Information Administration. Total fuel demand decreased by 2.1 million barrels per day throughout the week.
West Texas Intermediate crude futures rose 48 cents, to settle the settlement price at $ 24.49 a barrel, up two percent. Brent crude rose 24 cents, or 0.9 percent, to close at 27.39 dollars a barrel.
U.S. Senators and Trump administration officials have reached an agreement on a $ 2 trillion stimulus bill that Congress is expected to pass today, which helped boost markets.
The CEO of Vitol Group, the world's largest oil trading company, estimated demand has lost 15 to 20 million barrels per day over the next few weeks.
The US energy sector is shrinking capital spending and jobs, as capital expenditures in most shale oil companies are expected to drop by at least 30 percent.