Oil opened the week steady near $52 a barrel as investors weighed prospects for a huge stimulus package from the incoming Biden administration to fight the economic toll of the coronavirus outbreak.
Futures added 0.3% in Asian trading after capping the biggest weekly advance since the end of November on Friday. President-elect Joe Biden will lay out proposals this week for trillions of dollars in immediate fiscal support as the U.S. struggles to contain the spread of Covid-19. Iraq, meanwhile, raised the prices of its crude to Asia for February after a similar move by Saudi Arabia.
Oil has surged almost 50% since the end of October after a series of Covid-19 vaccine breakthroughs raised optimism for a sustained rebound in fuel consumption, despite the rollout of shots expected to take some time. The broader commodity market is seeing renewed confidence from investors, with record wagers that oil, crops and metals are set to rally.
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Saudi Arabia’s pledge last week for a unilateral output cut of 1 million barrels a day have eased concerns about over-supply. Brent’s prompt timespread ended Friday 16 cents in backwardation — where near-dated prices are more expensive than later-dated ones — compared with a 7 cent contango on Monday