Oil prices edged higher on Tuesday, helped by positive news about vaccine trials and a European Union stimulus deal but gains were capped by fears that new lockdowns could derail a recovery in demand.
Benchmark Brent crude was up 31 cents at $43.59, while West Texas Intermediate (WTI) gained 19 cents to $41.00. The closing prices of both have traded within a $2 channel so far in July.
The prices were buoyed by an agreement among European Union leaders on a 750 billion euro ($859 billion) fund to prop up their coronavirus-throttled economies, lifting prospects for fuel demand.
The deal allows the European Commission to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.
Oil prices were also supported by promising virus vaccine data released on Monday, raising confidence that a vaccine may be created even if a global rollout will take time.
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In China, some cinemas reopened on Monday after a six-month closure, another sign of recovery in the world’s second-largest economy.
s“At this stage, the market is going to need a strong a catalyst to break out of its recent range as it is not sharing, as a real asset, the optimism in equity markets,” BNP Paribas analyst Harry Tchilinguirian told the Reuters Global Oil Forum.
Countries from the United States to India are posting record numbers of infections, while some nations such as Spain and Australia are battling new outbreaks.
In the first big energy deal since the coronavirus crushed fuel demand, Chevron Corp said it would buy Noble Energy Inc for about $5 billion in stock.