Oil prices up as U.S. stimulus deal, Iraq output cut brings fresh hope

Oil prices rose earlier on Monday, recovering a portion of losses from last week’s session as the U.S. closed in on a stimulus deal. Iraq pledging to further cut its crude oil production also improved market sentiment.

U.S. West Texas Intermediate (WTI) crude futures gained 1.2% (49 cents), trading at $41.71 per barrel at 08:10 PM ET (0010 GMT). Meanwhile, Brent crude futures rose by 0.9% (40 cents) to $44.80 per barrel.

Brent closed higher at the end of the week by 2.5%, while WTI closed with a 2.4% gain despite the two benchmark contracts falling on Friday, taking a hit from demand concerns.

Hopes grew on Sunday that the U.S. Democratic Party and the White House would conclude with a new stimulus package to shore up its economy severely affected by the COVID-19 pandemic.

Meanwhile, Iraq on Friday announced that it would cut its crude output by another 400,000 barrels per day (bpd), totaling its production to 1.25 million bpd for August and September.

The decision comes in compliance with OPEC+ in order to compensate its crude overproduction in the last three months.