Oil gains on hopes U.S. pandemic stimulus payments to spur fuel demand

By Naveen Thukral
SINGAPORE, Dec 29 (Reuters) - Oil rose on Tuesday, for the
third time in four sessions, on expectations for rising fuel
demand as the United States may expand their pandemic aid
payments and a final Brexit deal is set to stabilize trade
between Europe and the UK.
Brent crude LCOc1 futures climbed 36 cents, or 0.7%, to
$51.22 a barrel, as of 0151 GMT and U.S. West Texas Intermediate
(WTI) crude CLc1 futures added 34 cents, or 0.7%, to $47.96 a
barrel.
Crude rose along with a gains in Asian shares, with Japanese
stocks hitting a 29-year high, on rising investor risk appetite
as the U.S. House of Representatives voted to raise pandemic
relief payments to $2,000 from $600. The Senate still needs to
vote on the measure. MKTS/GLOB
Forecasts for tightening U.S. crude oil stocks also added
support to prices.
U.S. crude oil stockpiles are expected to have declined last
week, while refined products inventories likely rose, a
preliminary Reuters poll ahead of this week's data showed on
Monday. Five analysts polled by Reuters estimated, on average, that
crude stocks likely fell by 2.1 million barrels in the week to
Dec. 25.
Still, concerns over coronavirus lockdowns are capping
gains.
A new variant of the virus in the United Kingdom has led to
the reimposition of movement restrictions, hitting near-term
demand and weighing on prices, while hospitalizations and
infections have surged in parts of Europe and Africa.
A Jan. 4 meeting of the Organization of the Petroleum
Exporting Countries (OPEC) and allies including Russia, a group
known as OPEC+, also looms over the market.
OPEC+ is tapering record oil output cuts made this year to
support the market. The group is set to boost output by 500,000
barrels per day (bpd) in January and Russia supports another
increase of the same amount in February.
Russian Deputy Prime Minister Alexander Novak said on Monday
he expected there would be 5 million to 6 million bpd additional
oil demand in 2021, which has not fully recovered from the
pandemic. Money managers raised their net-long U.S. crude futures and
options positions in the week to December 21, the U.S. Commodity
Futures Trading Commission said on Monday. The speculator group
raise its combined futures and options position in New York and
London by 4,455 contracts to 325,787 during the period.