DTN Oil

WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange pushed higher in afternoon trade Monday, with the front-month RBOB contract surging as much as 3% alongside rallying equities as traders increased their bets for a coronavirus relief-aid package in the United States and on stronger demand growth in China.

Traffic congestion in China's largest cities rose last week to the highest level since late January, jumping 5% above the 2019 average, according to the private data collected by TomTom International BV. On Sunday (9/27), Beijing traffic throughput was nearly 57% above the standard daily congestion last year that has raised hopes for accelerated demand growth into the year's end as the Chinese economy is set to pick up more speed. National Bureau of Statistics reported Sunday the country's industrial sector grew for the fourth straight month in August, surging 19.1% against year ago. Later this week, investors will get a first look at China's Purchasing Manufacturing Index for September, with consensus calling for a slight improvement to 51.2 vs. 51.0 in August.

Even still, crude stockpiles in China were reported near record high in the week ended Sept. 24 at 72.7% of capacity, according to a Bloomberg report citing data from satellite tracking company URSA.

Aside from China, commercial crude oil inventories in countries that are part of the Organization for Economic Cooperation and Development remain at elevated levels and are unlikely to fall below the 5-year average until at least the second quarter of next year, according to new estimates from the Organization of the Petroleum Exporting Countries. OPEC's Secretary General Mohammed Barkindo said Sunday global oil demand in 2020 is expected to contract by 9.5 million barrels per day (bpd) to about 10% below the last year.

Domestically, investors seemed to have increased their bets for Congress to reach a deal on another federal relief package before the Nov. 3 presidential election. U.S. House Speaker Nancy Pelosi on Sunday said she thought a deal could be reached with the White House within weeks.

Dow Jones Industrials rallied more than 500 points and S&P 500 advanced 1.5% on the session, while the U.S. dollar index retreated 0.38% to 94.302, boosting West Texas Intermediate futures.

November WTI futures added 35 cents to settle at $40.60 barrel (bbl), with November Brent futures on ICE finishing with a 51 cents gain at $42.43 bbl ahead of expiration on Wednesday (9/30). The December contract held a $0.44 premium to the expiring contract. NYMEX October ULSD futures added 1.33 cents to $1.1395 gallon ahead of contract expiration Wednesday afternoon, with the prompt spread at a 0.65 cents contango. October RBOB futures were up more than 3 cents with a $1.2466 gallon settlement, trading at a 3.34 cents premium to the November contract.

Liubov Georges can be reached at liubov.georges@dtn.com

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