Business

Oil increases on predictions of US stimulus leading to demand

29 Dec 2020

Picture used for illustrative purpose. File

Gulf Today Report

Oil advanced on Tuesday due to hope for a rise in fuel demand as the United States is likely to expand the pandemic aid and final Brexit deal will steady trade between Europe and the UK.

Brent crude climbed 23 cents, or 0.5%, to $51.09 a barrel, as of 04:10 GMT and US West Texas Intermediate (WTI) crude futures added 23 cents, or 0.5%, to $47.85 a barrel.

Stephen Innes, chief global market strategist at Axi said "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."

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Predictions for tightening US crude oil stocks to have declined last week and refined inventories gaining aided prices.

According to an estimation by analysts, crude stocks likely declined by 2.1 million barrels last week.

Also, the spread of the new variant and restrictions imposed by other countries have limited gains.

OPEC+ is set to meet on Jan 4. OPEC+ is narrowing oil output this year to support the market. It is likely to boost output by 500,00 barrels per day (bpd) in January.

Russian Deputy Prime Minister Alexander Novak said on Monday he expected there would be 5 million to 6 million bpd additional oil demand in 2021, which has not fully recovered from the pandemic.