Oil prices gained more ground on Wednesday as a U.S. coronavirus fiscal aid package and expectations of global economic recovery lifted hopes for higher fuel demand.
U.S. West Texas Intermediate (WTI) crude futures rose 27 cents, or 0.6%, to $48.27 a barrel, as of 0114 GMT, while Brent crude futures added 24 cents, or 0.5%, to $51.33 a barrel.
The Democrat-led U.S. House of Representatives voted to meet President Donald Trump’s demand to increase direct COVID-19 aid payments to Americans hurting from the pandemic to $2,000.
Asian shares retreated on Wednesday as investors cashed in on a recent rally, while the euro flirted with highs not seen in more than 2-1/2 years on as hopes of a gradual global economic recovery.
Oil prices could gain strength as vaccination programmes around the world begin next year.
In the short-term, concerns over coronavirus lockdowns are likely to cap gains.
A new variant of the virus in the United Kingdom has led to the reimposition of movement restrictions, hitting near-term demand and weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa.
Fossil-fuel demand in coming years could remain softer even after the pandemic as countries seek to limit emissions to slow climate change. Major oil companies, such as BP (NYSE:BP) Plc and Total SE, published forecasts that include scenarios where global oil demand may have peaked in 2019.
A Jan. 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, also looms over the market.
OPEC+ is tapering record oil output cuts made this year to support the market. The group is set to boost output by 500,000 barrels per day (bpd) in January, and Russia supports another increase of the same amount in February.