OIL PRICES UP AFTER US OKAYS STIMULUS PAYMENTS

Tue 29 December 2020:

Oil prices increased on Tuesday with uncertainties cleared over the US coronavirus relief bill, which was designed to reduce the economic impact of the COVID-19 outbreak.

International benchmark Brent crude was trading at $51.16 per barrel at 0631 GMT with a 0.51% increase after closing Monday at $50.90 a barrel.

American benchmark West Texas Intermediate (WTI) was at $47.89 per barrel at the same time for a 0.57% increase after ending the previous session at $47.62 a barrel.

On Sunday, markets were relieved when US President Donald Trump surprisingly signed off on the long-awaited COVID-19 stimulus package.

The package includes roughly $900 billion in pandemic relief, along with about $1.4 trillion to fund the federal government through September.. The coronavirus relief effort includes $600 payments to most Americans and the extension of unemployment benefits for those who lost their jobs during the coronavirus outbreak.

However, the House of Representatives voted Monday to increase COVID-19 stimulus payments to most Americans to $2,000 on Trump’s insistence.

Sustained low demand concerns boosted by the spread of the new virus variant are still exerting pressure on oil markets and weighing on prices.

Investors are now waiting for the outcome of the Jan. 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a group known as OPEC . The group is expected to review the markets and then decide on production cuts for the following month.

OPEC had previously agreed to add 500,000 barrels per day in January and, through monthly meetings, decide on the next month’s production quota that will not be more than 500,000 barrels per day.