Oil prices climbed on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID19 pandemic lockdowns globally could cool fuel consumption.
Brent crude futures for March gained 55 cents, or 1, to 55.30 a barrel by 0737 GMT after slipping 35 cents in the previous session.
U.S. West Texas Intermediate crude was at 52.52 a barrel, up 16 cents, or 0.3. There was no settlement on Monday as U.S. markets were closed for a public holiday. Frontmonth February WTI futures expire on Wednesday.
Investors are upbeat about demand in China, the worlds top crude oil importer, after data released on Monday showed its refinery output rose 3 to a new record in 2020. China was also the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID19 pandemic.
Yesterdays data out of China was a positive for oil prices, Michael McCarthy, chief market strategist at CMC Markets in Sydney said.
Investors are watching out for U.S. Presidentelect Bidens inauguration speech on Wednesday for details on the countrys 1.9 trillion aid package.
OANDAs AsiaPacific senior analyst Jeffrey Halley said Like other asset classes, oil has received a gentle U.S. stimulus tailwind in Asia.
Oil prices have also been supported by Saudi Arabias additional supply cuts in the next two months which are expected to draw down global inventories by 1.1 million barrels per day in the first quarter,…