Crude higher on US fiscal stimulus hopes; slowdown in COVID-19 cases

Singapore — 0238 GMT: Crude oil futures were higher in mid-morning trade in Asia on Aug. 11 as the prospects of an imminent US fiscal stimulus package that may lift consumption buoyed market sentiment, while the number of COVID-19 case count in the US and worldwide trended lower.

At 10:38 am Singapore time (0238 GMT), the ICE Brent October crude futures was up 19 cents/b (0.42%) from the Aug. 10 settle at $45.18/b, while NYMEX September light sweet crude contract was up by 27 cents/b (0.64%) at $42.21/b.

"Oil is holding up in pre-Asia trade on signs that the US may move forward with another economic stimulus deal that could bolster consumption," Stephen Innes, chief global markets analyst at AxiCorp, said in a note Aug. 11.

US lawmakers continued negotiating on the final details of a second coronavirus fiscal stimulus package after President Donald Trump signed executive orders on weekly unemployment benefits, eviction bans, temporary payroll tax holiday and deferral of student loan payments over the weekend.

U.S. Treasury Secretary Steven Mnuchin was reported saying on Aug. 10 as per media reports that if compromises were made, the deal could possibly be done this week.

The sentiment boost from an imminent deal in the US comes after Saudi Aramco, the world's largest oil company, said that demand is improving in the company's second-quarter results call on Aug. 9.

Meanwhile, even as the number of COVID-19 case counts worldwide topped 20 million, daily confirmed cases globally have been on the decline for three consecutive days, registering a six-day low of 224,179 cases on Aug. 9, latest data from John Hopkins University showed.

Daily infections in the US have also begun trending downwards and settled below 50,000 case counts on Aug. 9, after hitting a peak of 77,255 cases on July 16.

"Across both WTI and Brent crude oil prices, an ascending triangle pattern had formed with prices eyeing imminent breakout," Pan Jingyi, market strategist at IG, said Aug. 11.

Market participants will look to fresh cues from the inventory reports by the American Petroleum Institute and the Energy Information Administration on Aug. 11 and 12 respectively.

"A bigger than expected draw here may be the trigger to help see prices edge higher above resistance," said Jingyi.