UPDATE 6-Oil rises on hopes U.S. pandemic stimulus will spur fuel demand

* Oil up as U.S. stimulus feeds hope for improved demand
* OPEC+ meeting on Jan 4 in focus
* Coming Up: API data due at 4:30 p.m. EST (2130 GMT)

(New throughout, updates prices, market activity and comments)
By Nia Williams and Ahmad Ghaddar
CALGARY, Alberta/LONDON, Dec 29 (Reuters) - Oil prices
climbed on Tuesday on hopes the United States will expand
pandemic aid payments, a move that could spur fuel demand and
stimulate economic growth.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
settled 38 cents, or 0.8%, higher at $48.00 a barrel, while
Brent crude futures settled up 23 cents, or 0.5%, at $51.09 a
barrel.
"We are seeing strength in the oil market on the back of
progress with the U.S. stimulus package," said Gary Cunningham,
director of market research at Tradition Energy.
The Democratic-led U.S. House of Representatives voted to
meet President Donald Trump's demand to increase direct COVID-19
aid payments to Americans hurting from the pandemic to $2,000.
It remained unclear whether U.S. Senate Republicans would
also support the move. Majority Leader Mitch McConnell on
Tuesday rejected calls by Democrats for the Senate to approve
the increased stimulus aid by unanimous consent, although he
said the Senate would examine the issue this week. Concerns over coronavirus lockdowns capped oil market gains
in the short-term.
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.
Oil prices could gain strength as vaccination programs
around the world pick up steam next year, said Tony Headrick,
energy market analyst at CHS Hedging LLC.
"Optimism around vaccinations has the ability to overwhelm
the concerns around coronavirus we are seeing," he added.
Traders were looking ahead to the latest U.S. oil inventory
reports, expected to show crude stocks fell by 2.6 million
barrels last week, while refined product stocks rose. The
American Petroleum Institute's report was due at 4:30 p.m. EST
(2130 GMT). EIA/S
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.