Brent crude edges up as optimism over economy trumps demand concerns

By Florence Tan
SINGAPORE, Jan 19 (Reuters) - Brent crude futures edged up
on Tuesday as optimism that government stimulus will buoy global
economic growth and oil demand trumped concerns that renewed
COVID-19 pandemic lockdowns globally could cool fuel
consumption.
Brent crude futures LCOc1 for March rose 17 cents, or
0.3%, to $54.92 a barrel by 0150 GMT after slipping 35 cents in
the previous session.
U.S. West Texas Intermediate crude CLc1 was at $52.25 a
barrel, down 11 cents, or 0.2%. There was no settlement on
Monday as U.S. markets were closed for a public holiday.
Front-month February WTI futures expire on Wednesday.
Investors are upbeat about demand in China, the world's top
crude oil importer, after data released on Monday showed its
refinery output rose 3% to a new record in 2020. China was also
the only major economy in the world to avoid a contraction last
year as many nations struggled to contain the COVID-19 pandemic.
"Yesterday's data out of China was a positive for oil
prices," Michael McCarthy, chief market strategist at CMC
Markets in Sydney said.
Investors are watching out for U.S. President-elect Biden's
inauguration speech on Wednesday for details on the country's
$1.9 trillion aid package.
Oil prices have also been supported by Saudi Arabia's
additional supply cuts in the next two months which are expected
to draw down global inventories by 1.1 million barrels per day
in the first quarter, ANZ analysts said.
Concerns about rising COVID-19 cases globally and renewed
lockdowns weighing down fuel demand kept a lid on oil prices.
ANZ analysts flagged concerns about falling fuel sales in
India in January from December and rising COVID-19 cases in
China and Japan that could dampen oil demand.
"In Europe and the U.S., the slow rollout of vaccines is
also raising concerns that a rebound in demand will remain
elusive," the bank said.