Brent crude oil rises as optimism about the economy outweighs concerns about fuel demand

SINGAPORE (Reuters) – Brent crude futures rose Tuesday as optimism that government stimulus will support global economic growth and oil demand has outweighed concerns that new global COVID-19 pandemic freezes could cool down fuel consumption.

Brent crude futures for March were up 20 cents, or 0.4%, to $ 54.95 a barrel by 0351 GMT, after slipping 35 cents in the previous session.

US West Texas Intermediate Crude Oil was at $ 52.19 a barrel, down 17 cents or 0.3%. There was no deal on Monday as US markets were closed for a public holiday. WTI futures for the first month of February expire on Wednesday.

Investors are optimistic about demand in China, the world’s largest crude oil importer, after data released Monday showed the refinery’s production increased 3% to a new record in 2020. China was also the top. the only major economy in the world to avoid a contraction last year so many nations struggled to contain the COVID-19 pandemic.

“Yesterday’s data from China was positive for oil prices,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

Investors are watching US President-elect Biden’s inaugural speech Wednesday for details on the country’s $ 1.9 trillion aid package.

Jeffrey Halley, OANDA’s senior analyst for Asia and the Pacific, said: “Like other asset classes, oil has received a slight stimulus from the United States in Asia.”

Oil prices were also supported by Saudi Arabia’s additional cuts in the next two months which are expected to reduce global inventories by 1.1 million barrels per day in the first quarter, ANZ analysts said.

Concerns over rising COVID-19 cases globally and new blockages weighing down fuel demand have held back oil prices.

ANZ analysts signaled concerns over India’s lower fuel sales in January from December and increase in COVID-19 cases in China and Japan that could curb oil demand.

“In Europe and the United States, the slow introduction of vaccines also raises concerns that a rebound in demand will remain elusive,” the bank said.

Report by Florence Tan; Editing by Richard Pullin and Kenneth Maxwell