WASHINGTON: Oil rose to hit $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.
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 $0.68, or 1.3%, at $51.97 a barrel at 1020 GMT, after trading as high as $52.02, reversing an earlier decline. US West Texas Intermediate (WTI) crude added $0.69, or 1.4%, to $48.92.
“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.
Oil has recovered from historic lows reached earlier this year as the emerging pandemic hammered demand. Brent reached $52.48 on December 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 January 4 meeting of the Organisation 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.