WTI crude oil prices are holding somewhat steady since the previous session as rising hopes for the next round of fiscal stimulus measures in the US offset worries about weak demand due to continued rise in the number of coronavirus cases globally. At the time of writing, WTI crude oil is trading at around $40.24 per barrel.

On Wednesay, WTI crude oil turned bullish on the release of the EIA report which revealed a greater than expected decline in crude and distillate inventories. According to the EIA, crude stockpiles fell by 2 million barrels during the previous week, going against economists’ expectations for a 1.4 million barrel build instead. Distillate inventories fell by 3.2 million barrels while gasoline stocks declined by 700k barrels last week.

However, gains in crude oil prices remain limited due to the main concern about weakness in demand as a result of the pandemic. With cases continuing to rise and several regions reimposing restrictions, a rebound in oil demand seems unlikely anytime soon. A recent Reuters poll indicates that global oil demand could contract by anywhere between 8 million and 9.8 million bpd in 2020, slightly better than last month’s forecast for a decline of 8-10 million bpd.

Oil also faces pressure on the supply side, with OPEC nations having increased crude production by 160k bpd in September. Iran increased its exports while Libya restarted oil production last month, and some reports also suggest that Russia increased its oil production beyond the quotas agreed upon by OPEC+ countries.