Oil rebounds with equities offsetting the return of Opec+ supply

Oil erased losses as strong equities offset the return of Opec+ supply to a market already hit by a pandemic-driven demand slump.

Equity indices in the US, Europe and Asia ticked higher, with the S&P 500 Index rising for a third straight session amid speculation that lawmakers would move forward on a stimulus bill. Still, rising Opec crude output is keeping a lid on the rally.

The market is looking for its next clear signal, with a slew of mixed data pressuring it on either side. In Europe, airline EasyJet said it would add additional flights after better-than-expected demand for travel over the summer. 
 

China’s vehicle sales jumped in July compared with the previous year, but state-owned refiner Sinopec has been processing less oil because of flooding.

“There’s no real fundamental news here, at least right now, that says we should go higher or lower,” said Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC. “So we’ll probably just track equities and the US dollar.”

A persistent supply overhang coupled with a souring demand outlook because of the Covid-19 pandemic has kept US crude futures locked in a tight trading range near $40 a barrel since late June. Global virus cases have topped 18 million. Europe, Germany, Poland and the Netherlands recorded an increase in new cases, while in the US, cases increased 0.9 per cent as compared with the same time Sunday to 4.69 million.