Oil prices rise on expected economic recovery, likely drawdown in stocks

Filed on March 9, 2021 | Last updated on March 19, 2021 at 02.55 pm
Photo: Reuters

Investor focus remains on the prospects for a global economic recovery.

Oil prices rose on Tuesday on expectations of a recovery in the global economy after US Senate approval of a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventory in the United States.

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But a stronger dollar and receding fears of oil supply disruption from Saudi Arabia after an attack on its oil facilities capped price gains.

Brent crude futures for May rose by 32 cents, or 0.5 per cent, to $68.56 a barrel by 0125 GMT, while US West Texas Intermediate (WTI) crude for April rose 19 cents, or 0.3 per cent, to $65.24.

“Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy,” Stephen Innes, chief global markets strategist at Axi said in a note.

“Brent is currently holding up above $68, suggesting speculators are likely dipping their toes back in after yesterday’s chaos.”

Investor focus, meanwhile, remains on the prospects for a global economic recovery.

US Treasury Secretary Janet Yellen said on Monday that President Joe Biden’s $1.9 trillion coronavirus aid package will provide enough resources to fuel a “very strong” US economic recovery.

US crude oil and refined product stockpiles likely fell last week, with distillate inventories seen drawing down for fifth straight week, a preliminary Reuters poll showed on Monday.

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