Oil decreased on Monday, after earlier rising to $52 a barrel, as optimism over the U.S. stimulus package and the start of a European vaccination campaign was combated by weak need and the possibility of greater OPEC+ output.
After U.S. President Donald Trump backed down from a threat to block the $2.3 trillion bundle, Democrats on Monday will try to press through larger $2,000 relief payments. Europe on Sunday released a mass COVID-19 vaccination drive.
Brent crude fell 43 cents, or 0.84%, to settle at $50.86 per barrel, after trading as high as $52.02 earlier in the session. U.S. West Texas Intermediate (WTI) unrefined settled 61 cents, or 1.26%, lower at $47.62 per barrel.
“The finalizing of the U.S. stimulus bill, with the possibility of an increased size, should put a flooring under oil costs in a shortened week,” said Jeffrey Halley, an expert at broker OANDA.
Oil has recovered from historic lows hit this year as the pandemic hammered need. Brent reached $52.48 on Dec. 18, its highest because of March.
However, the emergence of a brand-new variation of the virus has resulted in motion restrictions being reimposed, hitting near-term demand and weighing on rates.
Oil remains vulnerable to any more setbacks in efforts to control the virus, said Stephen Innes, primary global market strategist at Axi, in a note.
Also entering focus will be a Jan. 4 conference of the Company of the Petroleum Exporting Countries and allies, a group known as OPEC+.
The group is tapering record oil output cuts made this year to support the market.
OPEC+ is set to boost output by 500,000 barrels daily in January and Russia supports another boost of the exact same amount in February.