Oil rises on hopes U.S. pandemic stimulus to spur fuel demand

Economy 09:36 AM - 2020-12-29

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Oil rose on Tuesday, for the third time in four sessions, on expectations for rising fuel demand as the United States may expand their pandemic aid payments and a final Brexit deal is set to stabilize trade between Europe and the UK.

 

Brent crude climbed 23 cents, or 0.5%, to $51.09 a barrel, as of 0410 GMT and U.S. West Texas Intermediate (WTI) crude futures added 23 cents, or 0.5%, to $47.85 a barrel.

 

“Markets feel very rangy into the New Year but should find support today from broader risk markets as stocks are soaring on the prospects of larger stimulus checks,” aid Stephen Innes, chief global market strategist at Axi, a broker.

 

“However, for oil markets gains could be limited due to the new COVID variant and OPEC meeting overhangs.”

 

Crude rose along with a gains in Asian shares, with Japanese stocks hitting a 30-year high, on rising investor risk appetite as the U.S. House of Representatives voted to raise pandemic relief payments to $2,000 from $600. The Senate still needs to vote on the measure. 

 

Forecasts for tightening U.S. crude oil stocks also added support to prices.

 

U.S. crude oil stockpiles are expected to have declined last week, while refined products inventories likely rose, a preliminary Reuters poll ahead of this week’s data showed on Monday.

 

Five analysts polled by Reuters estimated, on average, that crude stocks likely fell by 2.1 million barrels in the week to Dec. 25.

 

Still, concerns over coronavirus lockdowns are capping gains.

 

 

 

PUKmedia / Reuters