LONDON (Reuters) – Oil prices rose Tuesday as optimism that government stimulus will eventually resolve global economic growth and oil demand has outweighed concerns that new COVID-19 lockdowns are cooling fuel consumption.
Brent crude oil futures for March rose 73 cents, or 1.3%, to $ 55.48 a barrel by 1454 GMT, after slipping 35 cents in the previous session.
US West Texas Intermediate crude rose 17 cents, or 0.3%, to $ 52.53. 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.
A lower dollar also helped demand, making oil cheaper for holders of other currencies.
Investors are optimistic about demand in China, the world’s largest crude oil importer, after Monday’s data showed the refinery’s production increased 3% to a record high in 2020.
China also avoided an economic contraction last year.
Investors are looking at the US oil inventory data from the API industry association, scheduled for Wednesday, the inauguration day of US President-elect Joe Biden.
“As we approach the beginning of the Biden administration era in the US, traders are now hoping for a quick positive effect on the upcoming markets from the promised stimulus package ($ 1.9 trillion), “said Rystad’s head of oil markets, Bjornar Tonhaugen.
The International Energy Agency cut its outlook for oil demand in 2021 but indicated a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.
“Border closures, social expulsion measures and closures … will continue to limit the demand for fuel until vaccines are no longer widely distributed, most likely only by the second half of the year,” reads its monthly report. .
Additional reporting by Florence Tan; Editing by Louise Heavens and David Goodman