Oil prices rose on Monday after the US passed the $1.9 trillion relief bill and approved a third COVID-19 vaccine for emergency use, both signaling a better economic outlook.
International benchmark Brent crude was trading at $65.69 per barrel at 0710 GMT for a 1.97% increase after closing Friday at $64.42 a barrel.
American benchmark West Texas Intermediate (WTI) was at $62.69 per barrel at the same time for a 1.93% rise after it ended the previous session at $61.50 a barrel.
Oil prices started the week on an optimistic upswing with US approval of a third COVID-19 vaccine and with the House of Representatives passing the long-awaited US pandemic relief bill.
The House bill includes $1,400 stimulus checks to most individuals to revive the American economy, unemployment support of $400 per week through Aug. 29, and an expansion of the child tax credit for families up to $3,600 per child.
On the pandemic front, the bill allocates $20 billion for COVID-19 vaccine distribution, $50 billion for testing and tracing, $350 billion in state and local government aid, $25 billion aid for renters, and $170 billion for the reopening of K-12 schools and higher education.
Also, the US Food and Drug Administration (FDA) approved Johnson & Johnson's single-shot Covid-19 vaccine for emergency use on Saturday, paving the way for the delivery of millions of doses of a third effective vaccine to Americans as early as next week.
Investors are now keeping tabs on the upcoming ministerial meeting of OPEC+ on March 4 when oil-producing countries will decide whether to keep the current cuts or ease them further.
“The ball is seemingly on the Saudi side as we will see if the kingdom will continue its 1 million barrels per day unilateral curb or not,” Jose Chalhoub, political risk and oil analyst, told Anadolu Agency.
"Overall, based on the latest figures and statistics, global inventories are keeping their downward trend, demand is still far from pre-pandemic levels but picking up, and the market is tightening, so most probably we will have an ease of the current cuts from OPEC+,” he added.
Chalhoub pointed to some recent developments that could add to potential geopolitical risks and upward oil price pressure this week.
Among these are the “US’ blaming [Saudi Crown Prince] Mohammed bin Salman for the killing of Saudi journalist Jamal Khashoggi, the sanctions by Washington on many Saudi officials, and how this will affect the Saudi-US relationship. Also, tensions mounting in the Gulf after recent drone attacks by Yemeni rebels to Saudi soil, the attack against an Israeli ship in the Gulf of Oman and the strikes by the US against Iranian positions in Syria,” he said.
By Sibel Morrow