Oil prices gained on Tuesday as investors hope for a fast approval regarding the U.S. lawmakers’ proposed $2 trillion coronavirus aid package. The aid package is expected to ease the pandemic’s impact on the global economy, while underpinning oil demand.
Brent crude oil futures was up 2.3%, or 62 cents, at $27.65 per barrel. West Texas Intermediate crude futures rose 3.3%, or 76 cents, at $24.12.
The U.S. Federal Reserve released a set of programs that will save the economy from intensifying restrictions on commerce and trade used to slow down the spread of the virus.
Meanwhile, the $2 trillion coronavirus economic stimulus package was still debated by lawmakers inside the U.S. senate. U.S. Treasury Secretary Steven Mnuchin said that he was confident that a deal will be finalized soon.
The economic stimulus is set to push the dollar lower due to a rise in cash supply. The dollar index against a basket of currencies slid 0.5% on Tuesday.
However, the outlook for oil demand remains weak because of travel cancellations and restricted commercial activities.
Oil demand outlook was also affected by a growing number of new coronavirus cases in China as infected travelers from overseas return home to the country. This runs the risk of transmission in parts of China where no new cases are reported. China is the world’s biggest oil importer.