Oil is rising within the hope of a restoration in gas demand

© Reuters. FILE PHOTO: The sun can be seen behind a crude oil pump jack in the Permian Basin in Loving County

SINGAPORE (Reuters) – Oil prices gained ground on Wednesday as a U.S. coronavirus subsidy package and expectations of a global economic recovery raised hopes for higher fuel demand.

US West Texas Intermediate (WTI) crude oil futures rose 27 cents, or 0.6%, to $ 48.27 a barrel from 0114 GMT, while futures rose 24 cents, or 0.5%, to $ 51.33 a barrel gained.

The Democrat-led US House of Representatives agreed to President Donald Trump’s request to increase direct COVID-19 aid to Americans affected by the pandemic to $ 2,000.

Asian stocks pulled back on Wednesday as investors benefited from a recent rally, while the euro flirted with highs that have not been seen as hopes of a gradual recovery in the global economy for more than two and a half years.

Oil prices could strengthen as vaccination programs around the world begin next year.

In the short term, concerns about the coronavirus lockdown are likely to limit profits.

A new variant of the virus in the UK has resulted in restrictions on movement being reintroduced, short-term demand hit and prices hurt, while hospital stays and infections have risen sharply in parts of Europe and Africa.

Demand for fossil fuels could remain weaker in the years to come, even after the pandemic, as countries try to cap emissions to slow climate change. Big oil companies like BP (NYSE 🙂 Plc and Total SE have released projections that include scenarios where global oil demand could have peaked in 2019.

A meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, a group known as OPEC +, is also around the corner on January 4th.

OPEC + is tapering off record oil production cuts made this year to prop up the market. The group is expected to increase production by 500,000 barrels per day (bpd) in January, and Russia will support another increase of the same amount in February.

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