Oil cuts losses after Trump signs aid bill; demand problems persist

SINGAPORE (Reuters) – Oil cut some of its losses earlier Monday after US President Donald Trump signed a $ 2.3 trillion aid and spending package for coronaviruses, but concerns persist over the Short-term demand weighed on market sentiment.

Brent futures were down 25 cents, or 0.5%, to $ 51.04 a barrel at 7:00 GMT, after falling 1.5% to $ 50.53 a barrel earlier in the meeting.

US West Texas Intermediate (WTI) crude futures slipped 19 cents, or 0.4%, to $ 48.04 a barrel.

“With the signing of the bill by President Trump, oil quickly recouped most of its losses today, although Brent and WTI remain modestly in the red,” said Jeffrey Halley, senior market analyst at OANDA.

The US president’s decision was applauded as it would restore unemployment benefits to millions of Americans and prevent the federal government from shutting down.

“With trading volumes reduced by the holiday week, oil should stay under the radar for the next few days. That said, the signing of the US stimulus bill, with the possibility of an increase in size, should put a floor below oil prices in a shortened week, ”said Halley.

But a new, highly infectious variant of the coronavirus, which was first seen in Britain and has now been detected in several other countries, has led to the reimposition of mobility restrictions, fueling concerns about the resumption of request.

The oil market would take inspiration from the viral situation as it evolves in the coming days, market watchers said.

“With the urgent launch of mass vaccination programs around the world, the near-term fate of the oil market could be how quickly vaccines can close the gap in the race to contain the new variant,” said Stephen Innes , Chief Global Market Strategist at Axi. a note.

“Any complication on the pandemic front, whether it’s vaccine logistics or lockdown related, could sell for more as January’s oil demand is on less solid footing, especially if viral situations worsen more than expected after the holidays, ultimately handcuffing lawmakers. “