Oil gains on hopes of new stimulus spending
Recently, oil prices gained extraordinary, because of a key blending of a weaker dollar as well as expectations the incoming administration of the United States will surely offer massive stimulus spending that would increase fuel demand and draw down stocks of crude oil. Based on the currently released stocks data, the US West Texas Intermediate(WTI) crude futures jumped to 41 cents to 453.39 a barrel, while Brent Crude futures increased to 37 cents, to $56.27 a barrel.
Janet Yellen, who is the Treasury Secretary nominee of the United States president-elect Joe Biden, has urged lawmakers to perform on a big scale on COVID-19 pandemic relief spending, reinforcing believes in huge spending to accelerate growth. The head of commodity research of Australia Bank, Lachlan Shaw said that right now, our prime expectation is that it will assist better growth and demand rate in the United States of America.
Whereas, the senior market analysts, Jeffrey Halley said that a major decline in the dollar index considering the remarks made by the new Treasury Secretary will also help to boost oil prices. Several traders will be observing for Unites States crude as well as product inventory information which will be released from American Petroleum Institute on Wednesday and the Energy Information Administration on Friday.
It is reported that oil industries are expecting the United States commercial crude inventories to decline for 6 weeks successively, supporting oil prices. Some analysts have estimated that crude stocks decreased by 300,000 barrels in the week to the 15th of January, but anticipate gasoline stockpiles grow by around 3.0 million barrels.
However, the industry remains worried about near-term oil demand because International Energy Agency declines its outlook for 1st quarter oil consumption by the cost of 580,000 bpd, due to strict shutdowns and border halting to avoid soaring coronavirus infections.