Oil Steady Above $40 With U.S. Fuel Stockpiles Seen Declining

Oil was steady above $40 a barrel before government data thats expected to show U.S. fuel stockpiles declined further, while optimism for a fresh round of stimulus added to positive sentiment.

Oil has clawed its way back after dropping below $40 a barrel earlier in the month, but a resurgence of coronavirus cases in some major economies has raised concerns about a sustained recovery in demand. The market is also contending with an increase in supply from OPEC+ and Libya, which is boosting output as a blockade on its energy facilities is lifted.

See also: Venezuela and Iran Resist U.S. Sanctions With Fuel Flotilla

U.S. distillate stockpiles, which includes diesel, probably fell by 1 million barrels last week, while crude inventories expanded by 1 million barrels, according to the survey. Industry data is scheduled for Tuesday.

The outbreak, however, is forcing global refiners into a balancing act with their production due to the uneven rebound in fuel consumption. In India, processors are importing gasoline to cover demand as plants run below capacity, while in the U.S., refiners have idled some processing units to deal with access diesel supply.