Oil rises to touch $52 after Trump signs aid bill

By Alex Lawler


BUSINESS NEWS
DECEMBER 28, 2020

FILE PHOTO: A Marathon Oil well site is seen, as oil and gas activity dips in the Eagle Ford Shale oil field due to the coronavirus disease (COVID-19) pandemic and the drop in demand for oil globally, in Texas, U.S., May 18, 2020. Picture taken May 18, 2020. REUTERS/Jennifer Hiller/File Photo

LONDON (Reuters) - Oil rose to hit $52 a barrel on Monday as U.S. 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.

Trump, whose presidency is set to end next month, had earlier threatened to block the $2.3 trillion aid and spending package. Europe, meanwhile, launched a mass vaccination drive on Sunday.

Brent crude was up 68 cents, or 1.3%, at $51.97 a barrel at 1020 GMT, after trading as high as $52.02, reversing an earlier decline. U.S. West Texas Intermediate (WTI) crude added 69 cents, or 1.4%, to $48.92.

“The signing of the U.S. 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.

Oil has recovered from historic lows reached earlier this year as the emerging pandemic hammered demand. Brent reached $52.48 on Dec. 18, its highest since March.

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 reimposed, hitting near-term demand and weighing on prices.

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 Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies, a group known as 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 and so far there is no sign of wavering on going ahead with the supply increase.


Additional reporting by Koustav Samanta and Naveen Thukral; Editing by Simon Cameron-Moore and Susan Fenton