2020.06.1610:27:00UTC+00Oil Prices Extend Rally On Stimulus Hopes

Oil prices rose on Tuesday to extend gains from the previous session after reports that the Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the world's largest economy.

Benchmark Brent crude rallied 1.5 percent to $40.30 a barrel, after having gained 2.6 percent on Monday. U.S. crude futures were up 1.3 percent at $37.59 a barrel, after rising 2.4 percent in the previous session.

The Trump administrations plans to spend nearly $1 trillion on roads, bridges and 5G mobile broadband, Bloomberg News reported, citing people familiar with the matter.

Investors also cheered the Federal Reserve's latest move shore up the financial markets.

The Fed said Monday it will start buying individual corporate bonds to support market liquidity and the availability of credit for large employers.

Earlier today, the Bank of Japan increased the nominal size of its lending packages for cash-strapped firms to $1 trillion from about $700 billion announced last month.

Meanwhile, the number of global confirmed Covid-19 cases topped 8 million, adding to concerns about a second wave of lockdowns from rising infection rates.

Mainland China reported 40 new confirmed coronavirus cases for June 15, down from 49 a day earlier.

Two new cases have been confirmed in New Zealand after two women who flew in from London to see a dying parent had tested positive.

The coronavirus pandemic will hammer global growth and oil demand this year but output cuts by OPEC+, shutdowns in the U.S. and a record rebound in demand in next year will help rebalance the oil market, the International Energy Agency said in its monthly report.