Singapore—0255 GMT: Crude oil rose during mid-morning trade in Asia Dec. 29 as the oil complex was buoyed by bullish sentiment across risk assets emanating from US President Donald Trump's signing of the massive coronavirus relief and spending package, with a weaker dollar also lending market support.
At 10:55 am Singapore time (0255 GMT), the ICE Brent February contract was up 21 cents/b (0.41%) from the Dec. 28 settle to $51.07/b, while the February NYMEX light sweet crude contract was up 24 cents/b (0.5%) at $47.86/b.Both markers had fallen by 0.84% and 1.26% on Dec. 28 to settle at $50.86/b and $47.62/b, respectively, as concerns over the spread of the highly infectious B.1.1.7 variant of the coronavirus had weighed on the market.
In the Asian trading session, however, oil recouped the losses from Dec. 28, rising in tandem with Asia Pacific equity markets and US equity futures.
Margaret Yang, strategist at DailyFX, told S&P Global Platts Dec. 29: "Crude oil prices are buoyed by favorable sentiment across risk assets on the passing of US stimulus package, as well as a weakening US dollar."
On Dec. 28, Trump had signed the coronavirus relief and spending package, which includes a Congress-approved $900 billion stimulus package and government funding through September 2021, spurring optimism over a US economic recovery.
In an accompanying statement, Trump had demanded that Congress increase direct payments to $2,000 per individual -- a measure that has been approved by the Democrat-controlled US House of Representatives.
"The prospects for energy demand may be brightened by the coronavirus relief aid, especially after the House voted to increase the stimulus check amount to $2,000 from $600 this morning," Yang said.
Republicans, however, have shown resistance to higher direct payments, and it still remains unclear if the measure will be held to a vote in the Republican-controlled Senate.
Meanwhile, analysts surveyed by S&P Global Platts were bullish in their forecast for US commercial crude drawdown in the week ended Dec. 25, expecting stocks to have declined 3.8 million barrels to around 495.7 million barrels.
Comprehensive data on weekly inventory reports by the American Petroleum Institute and the US Energy Information Administration will be released on Dec. 29 and Dec. 30, respectively.
