SULAIMANI (ESTA) — Oil prices rose on Wednesday on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks.
Brent crude futures rose 32 cents to $56.23 a barrel, adding to a 2.1% gain on Tuesday. U.S. West Texas Intermediate (WTI) crude futures climbed 31 cents to $53.29 a barrel at 0613 GMT, building on a 1.2% rise on Tuesday.
U.S. President-elect Joe Biden’s Treasury Secretary nominee Janet Yellen urged lawmakers on Tuesday to “act big” on pandemic relief spending, reinforcing hopes of massive spending to boost growth, according to Reuters.
“Certainly the expectation is that will support better growth and better demand in the U.S.,” Reuters cited Lachlan Shaw, head of commodity research at the National Australia Bank, as saying.
However, the market remains concerned about near-term oil demand as the International Energy Agency cut its outlook for first-quarter oil demand by 580,000 barrels per day, due to tight lockdowns and border closures to stop soaring COVID-19 infections, Reuters reported.
China’s capital Beijing on Wednesday announced stricter coronavirus control measures and will shut down a subway station after the city reported its biggest daily jump in new COVID-19 cases in more than three weeks.
The country is experiencing its move severe COVID-19 outbreak since March 2020 ahead of the key Lunar New Year holiday season. More than 20 provincial-level regions have asked people to stay put during the holiday.
Germany on Tuesday extended a lockdown for most shops and schools for another two weeks, to Feb. 14.
