Picture: REUTERS
Picture: REUTERS

Singapore — Brent crude futures edged up on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed Covid-19 pandemic lockdowns globally could cool fuel consumption.

Brent crude futures for March rose 17c, or 0.3%, to $54.92 a barrel by 1.50am GMT after slipping 35c in the previous session.

US West Texas Intermediate crude was at $52.25 a barrel, down 11c, or 0.2%. There was no settlement on Monday as US markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.

Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020. China was also the only major economy in the world to avoid a contraction last year as many nations struggled to contain the Covid-19 pandemic.

“Yesterday’s data out of China was a positive for oil prices,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said.

Investors are watching out for US president-elect Biden’s inauguration speech on Wednesday for details on the country’s $1.9-trillion aid package.

Oil prices have also been supported by Saudi Arabia’s additional supply cuts in the next two months which are expected to draw down global inventories by 1.1-million barrels a day in the first quarter, ANZ analysts said.

Concerns about rising Covid-19 cases globally and renewed lockdowns weighing down fuel demand kept a lid on oil prices.

ANZ analysts flagged concerns about falling fuel sales in India in January from December and rising Covid-19 cases in China and Japan that could dampen oil demand.

“In Europe and the US, the slow rollout of vaccines is also raising concerns that a rebound in demand will remain elusive,” the bank said.

Reuters

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