WTI Crude Oil Strengthens as US Approves Bigger Stimulus Checks
WTI crude oil is trading strong early on Tuesday as markets cheer the confirmation of the coronavirus relief package with bigger stimulus checks even though weak demand concerns continue to weigh on markets. At the time of writing, WTI crude oil is trading at around $47.83 per barrel.
Crude oil has traded bullish for three out of the past four sessions over optimism about the coronavirus relief package being signed by President Trump. Trump’s calls for bigger payments in the stimulus checks, from $600 to $2,000, were also accepted, giving oil markets another reason to cheer in the hopes that it would spur fuel demand across the US.
OPEC and its allies are due to meet on January 4 and traders worry that they could potentially increase oil supply even though demand is yet to recover significantly. At the last meeting, OPEC+ countries had announced plans to increase production by 500k barrels starting January, but there are worries that some countries could push to increase production even further at the upcoming meeting.
Meanwhile, economists expect US crude inventories to have y declined by 2.1 million barrels over the past week, which is also supporting oil prices for now. However, gains in crude oil prices remained limited over concerns about new, more contagious strains of coronavirus being discovered in the UK, even as Europe and Africa experienced a spike in the number of hospitalizations due to the pandemic.
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