Brent oil price rose during the week ending Dec. 31, with the US coronavirus relief deal finally approved although it is currently in limbo, as Senate Majority Leader blocked the higher COVID stimulus payments stipulated in the agreement.
International benchmark Brent crude traded at $51.05 at 1500 GMT on Thursday, posting a 0.12% increase from Monday when trade at 0632 GMT registered at $50.99 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $47.91 at the same time on Thursday, relative to $48.02 a barrel on Monday.
The euphoria over the global rollout of the COVID-19 vaccines with the promise of returning oil demand and economic data back to normal was short-lived, as the distribution of vaccines turned out to be slower-than-expected. While long-term indicators for recovery are uncertain, investors are looking for short-term indicators to boost hopes.
Signaling a rebound in crude demand in the US, the world's largest oil consumer, a decline in US crude oil inventories last week drove oil prices up.
Commercial crude oil inventories in the US dropped by 6.1 million barrels last week, relative to the market expectation of a 2.1 million-barrel draw.
However, the number of US oil rigs increased by one to 264 last week compared to the previous week, signaling greater short-term output and raising supply glut concerns.
-US relief deal puzzle
To increase hopes of relief from the negative impacts of the virus that badly hit businesses in the US, US President Donald Trump signed off on a COVID-19 stimulus package late Sunday evening.
The House of Representatives voted Monday to increase the payments to most Americans to $2,000 on Trump's insistence, tripling the current $600.
However, Senate Majority Leader Mitch McConnell blocked the higher COVID stimulus payments and dampened hopes for a speedier recovery while dragging the markets back into uncertainty again.
Prices were also negatively impacted by a new strain of COVID virus that emerged in the UK and has since spread to several other countries. The mutant virus raised the risk of further tightening of the already-strict mitigation measures.
Tightening mitigation measures, including bans on New Year gatherings, the UK also approved the Oxford-AstraZeneca COVID-19 vaccine to use in the country.
Starting on Thursday, the National Health Service “will prioritize giving the first dose of the vaccine to those in the most high-risk groups,” said a statement from the Department of Health and Social Care.
The UK had rolled out the Pfizer/BioNTech vaccine in early December.
Markets in some areas closed earlier than usual on Thursday due to New Year’s Eve and will be closed on Friday.
By Sibel Morrow