Oil Rises on Hopes for an Increase in Fuel Demand, With Support of US Stimulus

Oil prices rose on Tuesday (December 29th) as investors took the risk of supporting the United States’ move to increase aid payments linked to the pandemic, which could increase demand for fuel and spur economic growth.

Brent crude rose 72 cents, equivalent to 1.4%, to $51.58 a barrel, while US West Texas Intermediate crude futures rose 67 cents, or 1.4%, to $ 48.29 a barrel.

On Monday, the Democratic-led US House of Representatives voted in favor of President Donald Trump’s request to make COVID-19 aid payments $ 2,000. But the Republican-controlled Senate still needs a vote on that measure.

Global stocks rose for the fourth consecutive session today on the back of US stimulus hopes.

However, concerns about coronavirus lockdown measures limited the gains.

The emergence of a new strain of the virus in the United Kingdom led to the re-imposition of movement restrictions, which led to an increase in demand in the near term and affect prices, while the number of hospital admissions and infections increased in parts of Europe and Africa.

The market is awaiting a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC +, on January 4.

OPEC + is working to trim record oil production cuts this year to support the market. The group is set to boost production by 500,000 bpd in January. Russia supports another increase in equal measure in February.

Yesterday, Monday, Russian Deputy Prime Minister Alexander Novak said that he expects an additional demand for oil between five and six million barrels per day next year, noting that global demand for crude is still below levels before the crisis of the Coronavirus pandemic.