Oil prices showed a limited rise on Tuesday as the new US Administration pledges a higher pandemic relief plan, although the global rise in coronavirus cases and ongoing mitigation efforts are fueling oil demand concerns.
International benchmark Brent crude was trading at $55.89 per barrel at 0654 GMT for a 0.41% increase after closing Monday at $55.66 a barrel.
American benchmark West Texas Intermediate (WTI) was at $52.53 per barrel at the same time for a 0.54% increase after it ended the previous session at $52.25 a barrel.
After hovering between $40-$50 a barrel for a long time, Brent oil is now lingering at around $55 per barrel. Most of the gains came after the OPEC decision last week to decrease rather than increase production rates for February and March.
Investors are now monitoring the developments on the upcoming coronavirus relief package, which is pledged to be in the “trillions”.
US President-elect Joe Biden said he would announce a proposal on Thursday to release trillions of dollars for Americans who need more financial relief from the coronavirus pandemic.
Biden said the plan would provide relief for state and local governments struggling with the pandemic, as well as new funding for people who have lost their jobs or are unable to afford rent.
However, despite vaccination efforts, the increase in the number of coronavirus cases worldwide and the tightening measures, including lockdowns and various restrictions especially in European countries, are increasing concerns that oil demand will continue to remain weak, limiting the rise in prices.
According to data from Johns Hopkins University on Tuesday, the number of cases worldwide has now reached over 90.8 million.
The US still tops the number of cases above 22.6 million, while cases in India now total over 10.4 million, and Brazil follows with over 8.1 million cases.