Picture: 123RF/PAVEL IGNATOV
Picture: 123RF/PAVEL IGNATOV

London — Oil rose towards $52 a barrel on Monday as US President Donald Trump’s signing of a coronavirus aid package and the start of a European vaccination campaign outweighed concern about weak near-term demand.

Brent crude rose 41c, or 0.8%, to $51.70 a barrel at 9.26am GMT, reversing an earlier decline. US West Texas Intermediate (WTI) crude added 44c, or 0.9%, to $48.67.

“The signing of the US stimulus bill, with the possibility of an increased size, should put a floor under oil prices in a shortened week,” said Jeffrey Halley, analyst at broker Oanda.

Trump, whose presidency is set to end on January 20, had earlier threatened to block the $2.3-trillion aid and spending package.

Oil has recovered from historic lows reached earlier in the year as the emerging pandemic hammered demand. And in a further sign of progress against Covid-19, Europe launched a mass vaccination drive on Sunday.

But, the emergence of a new variant of the virus, first seen in Britain and now detected in other countries, has led to movement restrictions being re-imposed, hitting near-term demand and weighing on prices. And Brent is still below the $52.48 level reached on December 18, which was its strongest since March.

Oil remains vulnerable to any further setbacks in efforts to control the virus, said Stephen Innes, chief global market strategist at Axi, in a note.

Also coming into focus will be a January 4 meeting of oil cartel Opec and allies (Opec+). The group is slowly tapering record oil output cuts made this year to support the market.

Opec+ is set to boost output by 500,000 barrels per day in January.

Reuters

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