Oil futures pushed higher Tuesday, bouncing after the previous session’s setback, as traders cheered another round of pandemic aid spending in the U.S.
West Texas Intermediate crude for February delivery rose 55 cents, or 1.2%, to $48.17 a barrel on the New York Mercantile Exchange. February Brent crude, the global benchmark, was up 58 cents, or 1.1%, at $51.44 a barrel on ICE Futures Europe.
“Oil appears to be underpinned by the passing of the U.S. stimulus and government funding omnibus legislation,” said Jeffrey Halley, senior market analyst at Oanda, in a note.
President Donald Trump finally signed legislation late Sunday providing $900 billion in aid to individuals and businesses and $1.4 trillion to fund government agencies. Trump last week blindsided lawmakers from both parties by criticizing the legislation, which his administration helped negotiate, and insisted that checks to be paid to households be raised from $600 to $2,000.
The Democratic-controlled House on Monday approved legislation that would increase the payments to $2,000, but the proposal faces an uncertain future in the Republican-controlled Senate.
Equities rallied Monday, with major benchmarks notching a new round of records. Oil initially rallied, but then pulled back to end the day lower.
Halley said the imminent increase in crude supplies next month, when the OPEC+ alliance will loosen production curbs, and runoffs for two senate seats in Georgia that will determine control of the U.S. Senate were “introducing a note of caution to an otherwise positive backdrop.”
“That probably means that oil will continue to range sideways, albeit noisily, for the rest of the week,” he said.
January natural gas futures were up 0.9% at $2.326 per million British thermal units.
January gasoline futures rose 1% to $1.382 a gallon, while January heating oil was up 1.1% at $1.4947 a gallon.