Meanwhile, Saudi Arabia again resolves to support the market: File Image/Pixabay
The U.S. House of Representatives voting to meet president Donald Trump's demand to increase direct Covid-19 aid payments to Americans was enough to propel crude prices on Tuesday modestly upward, on the assumption they will spur fuel demand and stimulate economic growth.
West Texas Intermediate settled up 38 cents at $48.00 per barrel, while Brent settled up 23 cents at $51.09 per barrel.
Gary Cunningham, director of market research at Tradition Energy, said, "We are seeing strength in the oil market on the back of progress with the U.S. stimulus package."
Tony Headrick, energy markets analyst, CHS Hedging
Optimism around vaccinations has the ability to overwhelm the concerns around coronavirus
Equally important to analysts is the steady roll out of the Covid vaccines that, as of Tuesday, have been administered to over 5 million people globally: Tony Headrick, energy market analyst at CHS Hedging, said oil prices could strengthen as the vaccination programs kick into high gear in the new year, and he added that "Optimism around vaccinations has the ability to overwhelm the concerns around coronavirus we are seeing."
As 2020 winds down, analysts are assessing the year of the pandemic and what's in store for the crude market moving forward, and GlobelData on Tuesday said that worldwide crude distillation capacity is expected to keep rising, but falling demand and weak margins for gasoline, diesel, and other fuels has prompted refineries in Asia and North America to close or curtail output, including several facilities along the U.S. Gulf Coast.
Also on Tuesday, Saudi Arabia announced it had reviewed the results of a pact with Saudi/Russia joint governmental committee meeting, in which the two countries reaffirmed commitment to the cooperation pact between petroleum producing countries and the declaration of the Organization of the Petroleum Exporting Countries (OPEC) to support the stability of global oil markets.
Meanwhile, Reuters on Tuesday reported that the United Arab Emirates, one of Washington's closest allies in the Middle East, is fast becoming a hub for companies helping Venezuela skirt American sanctions.
Reuters stated that Muhit Maritime FZE is one of three UAE-based entities that have shipped Venezuelan crude and fuel during the second half of this year.