By Adedapo Adesanya
Oil prices sustained uptrend on Thursday as optimism about progress towards a fiscal stimulus deal in the United States and a strong Asian demand spurred confidence in investors.
This pushed the price of the Brent crude higher by 42 cents or 0.82 per cent to $51.50 per barrel, while the West Texas Intermediate (WTI) rose by 54 cents or 1.13 per cent to trade at $48.36 per barrel.
Yesterday, the market reacted well to the news that lawmakers in the US are edging closer to an agreement on a $900 billion virus-relief spending package.
The package includes direct checks to Americans and enhanced federal unemployment benefits which will likely be attached to the broad government funding bill for the fiscal year.
Another factor that helped prices on Thursday was the report of record-breaking refining demand in China and India. The former’s oil demand has rebounded, with processing rates at Chinese refineries hitting all-time highs in October and November.
In India, the demand is also firmly on the rise as people opt for personal rather than public transport, boosting demand for petroleum.
The US Dollar hitting more than two-year low against major rivals on Thursday also helped oil because crude priced in the greenback becomes cheaper for buyers holding other currencies.
Support also came from progress in vaccine efforts as the United States expanded its campaign to deliver COVID-19 vaccine shots across the states.
The rollout of the first coronavirus vaccine in the world’s largest economy and the oil-consuming nation began this week and marked a major turning point in the country’s battle against surging case numbers as the first doses of the Pfizer medication was administered to health care workers and nursing home staffers.
Europe, on the other hand, is still battling with surging COVID-19 infections, with several countries recently announcing tighter lockdowns despite the coming holidays to stem the spread of the coronavirus.
There are also signs of weakening consumption from some countries in the Asian region including South Korea, as the coronavirus stages a comeback.
Modupe Gbadeyanka