Oil price stimulated by Congressional package pushed by Trump

Bloomberg/Fuel Fix:

Oil was swept up with other risk assets on optimism over a U.S. stimulus package to shore up the coronavirus-battered economy.

Futures advanced 2.8% in New York as House Speaker Nancy Pelosi signaled Congress will reach a deal on a massive spending bill, a day after the Federal Reserve unveiled a sweeping set of economic measures. Those efforts also helped equities rebound, with the Dow Jones Industrial average having its best day since 1933.

All that helped offset fears over a global crude glut. However, those worries are still reflected in the structure of the market, which sank further into contango -- a sign of oversupply where near-term cargoes are cheaper than those for later. Brent’s six-month time spread widened to levels not seen since 2009.

Major trading house Gunvor Group Ltd. estimated that the global crude surplus stood at 14 million to 15 million barrels a day as the coronavirus pandemic obliterates demand, and major producers such as Saudi Arabia and Russia pump more to gain market share.

“The hope for more stimulus is giving a short-term boost,” said Josh Graves, market strategist at RJ O’Brien & Associates LLC. “From a fundamentals standpoint, we’re still looking at two cataclysmic supply and demand shocks. Those need to be addressed before we see any sustained rally.”
...

I suspect there is a belief that restrictions on movement will be eased in the coming days which would increase the demand for fuel. There are roughly four days left on the 15-day isolation plan imposed by the US.  Trump has indicated that he will look at lifting the ban in areas where there have been no cases of coronavirus. That would include about 200 Texas counties and probably many more in what the left calls "fly-over" country.  The major problem areas a high-density population centers on the east and west coast where there is high usage of public transportation to spread the disease.

It is much easier for people in middle America to practice social distancing on a routine basis.

The crash in oil prices will continue to hit the workers in the fracking fields.  They should get some temporary relief from the proposals by the Trump administration to stimulate the economy as a whole. 

I also think the market share contest between the Saudis and Russia is not sustainable.  There are a limited number of tankers they can use to store their excess production and the cost of storage will only add to their woes.