Oil prices settled higher Dec. 4 as optimism surrounding US federal stimulus negotiations and a weaker dollar offset pandemic-driven demand concerns.
NYMEX January WTI settled 62 cents higher at $46.26/b and ICE February Brent was up 54 cents at $49.25/b.
Congressional Democrats and Republicans appear closer on passing a limited federal stimulus package this week, with Senate majority leader Mitch McConnell saying Dec. 3 that a bipartisan deal was "within reach," according to media reports. The proposed $908 billion aid package marks a significant compromise on the part of the Democrats, who had proposed a $3 trillion plan earlier this year.
A weakened US dollar added further price support. The ICE US Dollar Future Index was holding at around 90.77 in afternoon trading, just off multiyear low 90.72 seen the session prior.
Progress on stimulus negotiations offset concerns that the fast-spreading coronavirus pandemic could blunt demand outlooks. US payrolls added 245,000 jobs in November, the weakest increase since the labor market recovery began in May and well under market expectations of more than 400,000 new jobs.
While the report suggests the pace of the labor market recovery was slowing, it was also likely to encourage congressional action on stimulus, analyst said.
"The last nonfarm payroll report of the year was quickly shrugged off as softness in hiring should keep pressure on Congress to deliver another stimulus package before the holidays," OANDA senior market analyst Edward Moya said in a note.
NYMEX January RBOB settled 68 points higher at $1.2685/gal and January ULSD was up 97 points at $1.4030/gal.
Still, gasoline cracks again turned lower. The front-month ICE New York Harbor RBOB crack versus Brent edged down around 20 cents to $4.46/b in afternoon trading.
Oil prices also saw residual support from the Dec. 3 decision by OPEC+ to ease production quotas 500,000 b/d, instead of the 1.9 million b/d increase that had been originally scheduled, and plans to adjust them monthly, so as not to overwhelm the still-recovering market with new supplies.
The quota increase will be divvied up proportionally, with Saudi Arabia and Russia, the two largest members, each allowed to pump 126,000 b/d more, according to a document seen by S&P Global Platts.
OPEC's 13 members will be allowed to raise production by 304,000 b/d, and the nine non-OPEC partners will be allowed a 196,000 b/d increase, the document shows.
