Brent crude climbs up over demand concerns
On Tuesday, Brent crude futures gained massively as confidence that the US government stimulus will drift worldwide economic growth, as well as oil demand, exceeded concerns that renewed coronavirus pandemic lockdowns across the globe could reduce fuel consumption.
Reportedly, Brent crude futures for March gained to 17 cents or 0.3 percent to almost $54.92 per barrel after declining 35 cents in the last session. Whereas, the United States West Texas Intermediate crude was estimated at $52.25 a barrel, declined to 11 cents or 0.2 percent. There was no proper settlement yesterday as the United States markets were halted for a public holiday.
Investors are excited about demand in China which is the world’s leading crude oil importer. A recently released data represented that its refinery output increased to 3 percent to a new record in 2020. China was also the only essential economy in the globe to eliminate a contraction the previous year because several countries struggled to combat the coronavirus pandemic.
The chief market strategist of CMC Markets, Michael McCarthy said that yesterday’s information out of China was positive for oil prices. Investors are looking for the United States president-elect Joe Biden’s commencement speech on Wednesday for information on the $19 trillion aid package of the country.
Oil prices have also been assisted by extra supply cuts of Saudi Arabia in the next couple of months which are anticipated to draw down worldwide inventories by 1.1 barrels per day in the 1st quarter. Analysts raised concerns about increasing coronavirus cases worldwide and renewed shutdowns decreasing fuel demand kept a roof on oil prices. In the United States and Europe, the moderate rollout of vaccinations is also generating worries that a recovery in fuel demand will remain tricky.