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CORRECTED-UPDATE 3-Oil prices rise as investors look to higher demand seen in second half

Published 19/01/2021, 06:56
© Reuters.
LCO
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CL
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(Corrects to say API data expected Wednesday, not Tuesday)
By Shadia Nasralla
LONDON, Jan 19 (Reuters) - Oil prices climbed on Tuesday as
optimism that government stimulus will eventually lift global
economic growth and oil demand trumped concerns that renewed
COVID-19 pandemic lockdowns globally are cooling fuel
consumption.
Brent crude futures LCOc1 for March rose 46 cents to
$55.21 a barrel by 0916 GMT after slipping 35 cents in the
previous session.
"The perception that any retracement will be quick as
confidence in economic and oil demand recovery is unlikely to
fade away," said PVM analysts in a note.
U.S. West Texas Intermediate crude CLc1 was at $52.40 a
barrel, up 4 cents. 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 also avoided an economic contraction last year.
Investors are watching out for U.S. oil inventory data from
the industry association API, due on Wednesday, the same day
U.S. President-elect Biden's inauguration speech will likely
give details on the country's $1.9 trillion aid package.
The International Energy Agency cut its outlook for oil
demand in 2021, but pointed to a recovery in demand in the
second half of the year to an annual average of 96.6 million
barrels per day. "Border closures, social distancing measures and
shutdowns...will continue to constrain fuel demand until
vaccines are more widely distributed, most likely only by the
second half of the year," it said in its monthly report.


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