Oil slips on demand worries

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    MELBOURNE- Oil prices fell on Tuesday as demand concerns driven by COVID-19 outweighed hopes that US lawmakers and the White House were nearing an agreement on a new stimulus package to revive the world’s biggest economy.

    US West Texas Intermediate (WTI) crude futures slipped 17 cents, or 0.4 percent, to $40.43, while Brent crude futures also fell 17 cents, or 0.4 percent, to $42.26 a barrel. Both benchmarks rose about 1 percent on Monday.

    Commodities markets had crept up in earlier trade as Democratic lawmakers unveiled a new $2.2 trillion coronavirus relief bill, which US House of Representatives Speaker Nancy Pelosi said was a compromise measure.

    “If it happens, the US stimulus checks will go a long way to shoring up US oil demand at a most critical juncture and could move oil prices back into a pre-September frame of mind,” AxiCorp market strategist Stephen Innes said in a note.

    Brent and WTI in August hit their highest levels since early March on optimism over rising fuel demand and major oil producers’ strong compliance with promised supply cuts, but have since dropped by about $3 on demand worries.