Oil prices rise on hopes of US stimulus and supply concerns

NEW YORK (Reuters) – Oil prices rose Monday as optimism about U.S. stimulus plans and some supply concerns pushed futures, but demand concerns driven by coronavirus lockdowns limited gains.

Brent crude futures were up 31 cents to $ 55.72 a barrel at 13:32 EST (1832 GMT). US West Texas Intermediate crude rose 32 cents to $ 52.59 a barrel.

Administration officials of US President Joe Biden in a Sunday call with Republican and Democratic lawmakers tried to avoid Republican concerns that his $ 1.9 trillion pandemic relief proposal was too expensive.

“In the United States, the newly inaugurated President Biden appears to be pushing for swift approval of his proposed $ 1.9 trillion pandemic aid package, a development interpreted by the market as a clear indication that the new US administration aims to kick off a an economic recovery, which will naturally benefit fuel consumption, ”said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

The Organization of Petroleum Exporting Countries and its allies adherence to the promised oil production limits averaged 85% so far in January, oil tracker Petro-Logistics said Monday, suggesting the group has improved its adherence to the limits of the offer promised.

Other offer-related concerns offered support. Indonesia said its coast guard seized an Iranian-flagged oil tanker over suspected illegal fuel transfers, raising the prospect of further tensions in the oil-exporting Gulf.

Production from Kazakhstan’s gigantic Tengiz camp was cut off by a power outage on January 17.

Meanwhile, European nations have imposed stiff restrictions to stop the spread of the virus, while China has reported an increase in new COVID-19 cases, casting a pallor on the prospects for demand in the world’s largest energy consumer.

Barclays raised its oil price predictions for 2021, but said rising cases in China could contribute to near-term withdrawals.

Stephanie Kelly’s reportage in New York; additional reportage by Noah Browning in London; Editing by Paul Simao and David Evans