New York — Crude prices were holding lower in midday US trading Sept. 25 as the market eyed rising COVID-19 cases in Europe as well as fresh hopes for more US stimulus spending.
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At 1553 GMT NYMEX November WTI was 30 cents lower at 40.01/b and ICE November Brent was down 26 cents at $41.68/b.
In Europe, resurgence of the coronavirus is prompting governments to reintroduce new restrictions on movement. Around 40% of Madrid's intensive care capacity is now taken up by people suffering from the virus, while on Sept. 24 France, the UK and Spain reported 16,096, 6,634 and 2,321 new cases, respectively -- the highest totals for those countries since spring.
"The crude demand outlook is unlikely to get a bump until concerns over growing coronavirus restrictions in both Europe and the US ease," said OANDA senior market analyst Edward Moya in a note.
While the new restrictions on travel and trade are generally bearish for oil demand, outlooks remain somewhat supported due to the fact that so far there is little appetite for a return to full lockdown measures seen during the spring.
"[European] policymakers' view on what makes effective countermeasures to the coronavirus's spread has apparently changed -- blanket lockdowns, which caused sharp economic dislocations, are no longer in favor; selective measures targeting specific places/activity are in," S&P Global Platts Analytics said.
Meanwhile, refined products futures gleaned some support from the prospect of a second round of US stimulus spending.
NYMEX October RBOB was up 35 points at $1.1992/gal while October ULSD was trading around even and was up 11 points at $1.1178/gal.
US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi agreed Sept. 24 to revive negotiations on a federal stimulus bill that stalled earlier this summer.
Democrats in the House of Representative are seeking an aid plan for airlines, restaurants and small business worth $2.4 trillion, according to media reports Sept. 25. The White House has signaled that it would support $1.5 trillion in spending, but some Republicans are opposed to that level. The bill that the house passed in May was worth $3.5 trillion and included $25 billion for airlines.
Gasoline cracks were again testing one-month highs intraday. The front-month ICE NYH RBOB crack versus Brent strengthened to around $7.70/b midmorning Sept. 25, on pace to close at the strongest level since Aug. 24.