Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases.
Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut.
Wall Street’s main indexes opened higher on Wednesday, supported by heavyweight technology stocks. The dollar traded lower, which can boost oil as investors switch asset classes.
“Between the dollar, the EIA and the warning from the IEA that may impact future OPEC policy, the tone has turned bullish here,” said Bob Yawger, director of energy futures at Mizuho in New York.
Data from the U.S. Energy Information Administration (EIA)is expected to show crude oil stockpiles moving lower in the latest week, according to analysts polled by Reuters.