WASHINGTON (DTN) -- Nearby delivery crude and product futures on the New York Mercantile Exchange and Brent contract on the Intercontinental Exchange settled higher Tuesday, bolstered by rallying equities amid hopes for a potential economic stimulus in the United States, while Russian officials indicated further cooperation with the Organization of the Petroleum Exporting Countries (OPEC) on managing global oil supplies.
Oil traders also positioned ahead of the release of weekly inventory data from American Petroleum Institute due out 4:30 p.m. EDT. Markets mostly expect crude oil stocks in the United States to have increased by 2.8 million barrels (bbl) during the first week of March, as refinery run rates are seen to have eased 0.1%. Gasoline stocks are projected to have decreased 2.1 million bbl and distillate fuel supply likely to have fallen by 1.7 million bbl on the week.
On the session, front-month delivery West Texas Intermediate April futures gained $3.23 or 11% to $34.36 a bbl and ICE May Brent contract surged $2.86 for a $37.22 bbl settlement. NYMEX April RBOB futures advanced 8.74 cents to $1.2243 gallon and NYMEX April ULSD futures clawed back 3.30 cents to a $1.1697 gallon settlement.
Tuesday reports indicate Russia's Energy Ministry Alexander Novak will meet with the country's oil companies on Wednesday to discuss potential cooperation with the OPEC in the coming months. The next meeting among 23 oil-producing nations is planned for late May, early June.
Some in the market remain optimistic that Russia would eventually come back to the negotiating table as current prices are well below the country's breakeven budget requirements. Furthermore, the Russian ruble collapsed against the U.S. dollar this week as a result of the recent slide in oil prices, exerting further pressure on the country's economy. In his latest comments, Novak said the OPEC+ deal in the past three years had been effective and the doors for further cooperation are not closed.
Traders also remain skeptical over promised hike in crude output from Saudi Arabia after the kingdom said it would pump 12.3 million barrels per day (bpd) next month.
That is about 300,000 bbl more than its previous maximum sustained capacity per day. Despite emerging hopes for both countries to eventually strike some sort of a deal, oil prices are likely to remain under pressure in the near term.
In financial markets, U.S. stocks finished Tuesday higher, although off the earlier highs after reports emerged Trump administration is not ready to roll over a payroll tax cut as part of a stimulus package. Late Monday, President Donald Trump said he would be seeking major policy changes as soon as this week to arrest the recent carnage across markets. Trump's comments made clear that the White House is considering a huge and expensive government response to the worsening COVID-19 epidemic domestically.
Earlier this week, Securities and Exchange Commission became the first federal agency to ask its employees to work from home due to the scare of pandemic.
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