Oil Exceeds $56 Thanks to US Stimulus Hopes Ahead of Biden’s Inauguration

Oil prices exceeded $56 a barrel today, Wednesday, with the support of expectations that the new US administration will adopt huge stimulus spending to boost demand, as well as restrictions imposed by OPEC on production and expectations of lower US crude stocks.

On Tuesday, US Treasury Secretary Candidate Janet Yellen urged lawmakers to take a big step in terms of spending on stimulus to mitigate the repercussions of the Corona pandemic. Analysts said that the dollar’s ​​decline after these statements contributed to the rise of oil.

Brent crude was up 42 cents, or 0.8%, at $ 56.32 a barrel, after rising 2.1% on Tuesday. US West Texas Intermediate crude jumped 51 cents, or 1%, to $ 53.49 a barrel.

Brent crude this month recorded its highest level in 11 months, reaching $ 57.42 a barrel, supported by Saudi Arabia’s pledge to further voluntary cuts in production, while most OPEC+ member states agreed to keep production at its level unchanged in February.

Oil was further supported by expectations of lower US crude inventories. Analysts expect stocks to drop by 300,000 barrels. The American Petroleum Institute is expected to announce today, Wednesday, the first of two weekly supply reports.

However, the gains were limited by concerns about demand in the near term as COVID-19 cases continued to rise.