Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil prices rise on expected economic recovery, likely drawdown in oil stocks

Published 09/03/2021, 01:54
Updated 09/03/2021, 01:55
© Reuters. FILE PHOTO: Oil tankers are pictured in the waters off Tuas in Singapore

© Reuters. FILE PHOTO: Oil tankers are pictured in the waters off Tuas in Singapore

By Jessica Jaganathan

SINGAPORE (Reuters) - Oil prices rose on Tuesday on expectations of a recovery in the global economy after U.S. Senate approval of a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventory in the United States.

But a stronger dollar and receding fears of oil supply disruption from Saudi Arabia after an attack on its oil facilities capped price gains.

Brent crude futures for May rose by 32 cents, or 0.5%, to $68.56 a barrel by 0125 GMT, while U.S. West Texas Intermediate (WTI) crude for April rose 19 cents, or 0.3%, to $65.24.

"Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy," Stephen Innes, chief global markets strategist at Axi said in a note.

"Brent is currently holding up above $68, suggesting speculators are likely dipping their toes back in after yesterday's chaos."

On Monday, Brent crude oil price rose above $70 a barrel after Yemen's Houthi forces fired drones and missiles at the heart of the Saudi oil industry, including a Saudi Aramco (SE:2222) facility at Ras Tanura vital to petroleum exports.

Riyadh said there were no casualties or loss of property and prices ended the day lower.

Still, the United States expressed alarm at "genuine security threats" to Saudi Arabia from Yemen's Iran-aligned Houthis and elsewhere in the region, and said it would look at improving support for Saudi defences.

The attacks came after the Organization of the Petroleum Exporting Countries, Russia and their oil producing allies, known as OPEC+, agreed last week agree on broadly sticking with output cuts despite rising crude prices.

Investor focus, meanwhile, remains on the prospects for a global economic recovery.

U.S. Treasury Secretary Janet Yellen said on Monday that President Joe Biden's $1.9 trillion coronavirus aid package will provide enough resources to fuel a "very strong" U.S. economic recovery.

© Reuters. FILE PHOTO: Oil tankers are pictured in the waters off Tuas in Singapore

U.S. crude oil and refined product stockpiles likely fell last week, with distillate inventories seen drawing down for fifth straight week, a preliminary Reuters poll showed on Monday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.