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Oil prices climb amid stimulus hopes

Release Date:2021-01-21 18:36:49     Source:Xinhua

Oil prices moved higher on Wednesday, buoyed by hopes for further U.S. fiscal stimulus.

The West Texas Intermediate for February delivery added 26 cents to settle at 53.24 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery increased 18 cents to close at 56.08 dollars a barrel on the London ICE Futures Exchange.

U.S. Treasury Secretary nominee Janet Yellen on Tuesday urged the U.S. Congress to "act big" with a new COVID-19 relief package as the economic recovery is losing momentum amid surging coronavirus cases.

"Oil prices have responded positively to yesterday's statements by U.S. Treasury Secretary-designate Yellen and to the ensuing USD weakness," Eugen Weinberg, energy analyst at Commerzbank Research, said in a note Wednesday.

"The calculation is simple: increased fiscal support means more growth and higher U.S. oil demand," he said, adding the stimulus optimism has offset a downward revise of the demand forecast by the International Energy Agency (IEA).

In its closely-watched January report, the IEA has lowered its demand estimate for the first quarter of 2021 by 600,000 barrels per day and for 2021 as a whole by 300,000 barrels per day because of the global lockdowns.

 

Editor: Galia

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