Oil rose towards $52 a barrel on Monday as U.S. President Donald Trump‘s signing of a coronavirus aid package and the start of a European vaccination campaign outweighed concern about weak near-term demand.
Brent crude rose 41 cents, or 0.8%, to $51.70 a barrel at 0926 GMT, reversing an earlier decline. U.S. West Texas Intermediate (WTI) crude added 44 cents, or 0.9%, to $48.67.
“The signing of the U.S. stimulus bill, with the possibility of an increased size, should put a floor under oil prices in a shortened week,” said Jeffrey Halley, analyst at broker OANDA.
Trump, whose presidency is set to end next month, had earlier threatened to block the $2.3 trillion aid and spending package.
Oil has recovered from historic lows reached in the spring as the emerging pandemic hammered demand. And in a further sign of progress against COVID-19, Europe launched a mass vaccination drive on Sunday.
But, the emergence of a new variant of the virus, first seen in Britain and now detected in other countries, has led to movement restrictions being reimposed, hitting near-term demand and weighing on prices. And Brent is still below the $52.48 level reached on Dec. 18, which was its strongest since March.
Oil remains vulnerable to any further setbacks in efforts to control the virus, said Stephen Innes, chief global market strategist at Axi, in a note.
Also coming into focus will be a Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+. The group is slowly tapering record oil output cuts made this year to support the market.
OPEC+ is set to boost output by 500,000 barrels per day in January.