Oil prices rise on expected economic recovery, likely drawdown in oil stocks

An oil pump jack is seen in La Canada de Urdaneta, Venezuela October 1, 2019. Picture taken October 1, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Tuesday on expectations of a recovery in the global economy after the U.S. Senate approved a $1.09 trillion stimulus bill and on a likely drawdown in crude oil inventories in the United States.

Brent crude futures for may rose by 38 cents to $68.62 a barrel by 0551 GMT, while U.S. West Texas Intermedia (WTI) crude for April rose 30 cents to $65.35.

“Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy,” Reuters quoted Stephen Innes, chief global markets strategist at Axi as saying.

On Monday, Brent crude oil prices rose above $70 a barrel after Yemen’s Houthi forces fired drones and missiles at the heart of the Saudi oil industry, including a Saudi Aramco facility at Ras Tanura vital to petroleum exports.

U.S. Treasury Secretary Janet Yellen said on Monday that President Joe Biden’s $1.9 trillion coronavirus aid package will provide enough resources to fuel a “very strong” U.S. economic recovery. The House of Representatives must still pass the Senate version of the package for it to become law.

U.S. crude oil and refined product stockpiles likely fell last week, with distillate inventories seen drawing down for fifth straight week, a preliminary Reuters poll showed on Monday.

“The fundamentals have not changed at all for oil and some investors might be automatically buying crude on any dip,” said Edward Moya, senior market analyst at OANDA, according to Reuters.

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