Oil rose on Wednesday on expectations that the US President Joe Biden’s administration would increase fuel demand, implement policies to shrink crude oil supplies, and provide strong economic stimulus related to the outbreak.
Biden, who started on Wednesday, is preparing to take immediate action on the US oil industry, including a plan to re-enter the Paris climate agreement, cancel the Keystone XL crude oil pipeline permit, and stop planned drilling in the Arctic.
Brent crude settled at $56.08 a barrel, gaining 18 cents. West Texas Intermediate (WTI) crude settled at $53.24 a barrel, climbing 26 cents.
Last week, US crude oil stocks unexpectedly increased by 2.6 million barrels to about 487.1 million barrels. Official weekly figures will be announced on Friday.
Hopes about the stimulus grew stronger. There is a good mood with sense of progress in the markets in general that demand would increase.
Globally, supplies contracted last year due to record production cuts by OPEC and its allies, helping prices rise from historic lows.
This month, Brent hit an 11-month high of $ 57.42, with Saudi Arabia promising additional, voluntary cuts and most OPEC + members agreeing to hold production steady in February.
In case the supply is restricted, expected moves to reduce carbon can also increase prices. With the Biden administration, it seems that the pro-green energy and anti-fossil fuel policies will return.