Oil prices climbed on Tuesday on hopes the United States will expand pandemic aid payments, a move that could spur fuel demand and stimulate economic growth.
U.S. West Texas Intermediate (WTI) crude futures settled 38 cents, or 0.8%, higher at $48.00 a barrel, while Brent crude futures settled up 23 cents, or 0.5%, at $51.09 a barrel.
“We are seeing strength in the oil market on the back of progress with the U.S. stimulus package,” said Gary Cunningham, director of market research at Tradition Energy.
The Democratic-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.
It remained unclear whether U.S. Senate Republicans would also support the move. Majority Leader Mitch McConnell on Tuesday rejected calls by Democrats for the Senate to approve the increased stimulus aid by unanimous consent, although he said the Senate would examine the issue this week.
Concerns over coronavirus lockdowns capped oil market gains in the short-term.
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.
Credit: Financial Post