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05 Oct 2020 | 20:59 UTC — New York
Highlights
Democrats, White House continue stimulus talks
Expected US gasoline draw deflates surplus
BP evacuates GOM platforms ahead of TS Delta
Oil futures settled sharply higher Oct. 5 amid signs of progress between Congressional Democrats and the White House on a coronavirus relief bill.
NYMEX November WTI settled $2.17 higher at $39.22/b, while ICE December Brent was up $2.02 to settle at $41.29/b.
Negotiations continued Oct. 5 between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on a second coronavirus relief bill, raising hopes the two sides could reach an agreement ahead of the November elections.
Adding to bullish sentiment, US President Donald Trump said in a tweet he expects to be discharged from Walter Reed Medical Center later Oct. 5.
Crude futures had settled at one-month lows Oct. 2 following news Trump had tested positive for the coronavirus.
"Crude prices steadily rose higher alongside surging equities as an improving President Trump would raise the chances that a fiscal stimulus deal will get done before the election," OANDA senior market analyst Edward Moya said in a note. "Oil is following the broader market right now. These gains on stimulus prospects could easily go up in smoke."
Total US gasoline inventories are expected to have declined around 800,000 barrels to 227.4 million barrels in the week ended Oct. 2, according to analysts surveyed by S&P Global Platts. The expected draw would put gasoline stocks behind the five-year average for the first time since the week ended March 13.
Notably, it has been lowered refinery runs, rather than increased demand, that has led to the recent gasoline draws. Apple Mobility data shows driving activity declined in the week ended Oct. 2, marking a fourth weekly slide.
NYMEX November RBOB settled up 7.06 cents at $1.1941/gal on Oct. 5, and November ULSD was up 4.83 cents to settle at $1.1333/gal.
US Gulf offshore oil and gas producers began evacuating personnel Oct. 5 ahead of Tropical Storm Delta, which is expected to enter the area as a hurricane before making landfall in Louisiana later this week.
BP said it has begun "securing its offshore facilities and evacuating non-essential personnel" from its four offshore platforms: Thunder Horse, Atlantis, Mad Dog and Na Kika.
The US' National Hurricane Center predicts Delta to become a hurricane late Oct. 6 and reach landfall along the central-east Louisiana coast the morning of Oct. 9.