Oil prices rallied on Monday as the economy of the world’s largest oil importer, China, showed signs of recovery, while the US stimulus deal also supported prices by boosting the country’s oil demand and economy.
International benchmark Brent crude was trading at $69.72 per barrel at 0658 GMT for a 0.72% increase after closing Friday at $69.22 a barrel.
American benchmark West Texas Intermediate (WTI) was at $66.09 per barrel at the same time for a 0.73% rise after it ended the previous session at $65.61 a barrel.
Oil markets started the week on an upward trend after last week’s euphoria over US President Joe Biden’s $1.9 trillion coronavirus relief bill that was signed into law.
The bill is expected to heal the economy of the world’s largest oil-consuming country by providing $1,400 in direct payments to most Americans, expanding the child tax credit rate up to $3,600, and boosting funds for state and local governments reeling from the coronavirus pandemic.
Crude oil prices were also helped by China's daily refinery throughput, which increased 15% in the first two months of this year compared to last year.
According to data from the National Bureau of Statistics, refinery processing in the country reached 114.24 million tonnes in January and February, indicating an improving economy.
Although the acceleration of vaccine rollouts throughout the world looks promising, vaccine safety concerns are casting doubts over oil demand recovering in the short term.
Following similar moves by other EU countries last week, the Netherlands suspended the rollout of the Oxford/AstraZeneca vaccine over fears of serious blood clots.
Ireland, Denmark, Norway, and Austria had already suspended their rollouts of the AstraZeneca vaccine.
Crude oil prices, which are indexed to the US dollar, also came under pressure with the rising value of the greenback.
The US dollar index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose 0.14% to 91.81.
By Sibel Morrow