Oil prices moved higher on Monday after U.S. President Donald Trump signed a $2.3 trillion coronavirus aid and spending package.
Brent crude futures added 12 cents, or 0.2%, at $51.41 a barrel at 0803 GMT, having fallen as much as 1.5% to $50.53 a barrel earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures rose 18 cents, or 0.4%, to $48.41 a barrel.
“With trading volumes thinned by the holiday week, oil is likely to remain below the radar in coming days. That said, the signing of the U.S. stimulus bill, with the possibility of an increased size, should put a floor under oil prices in a shortened week,” said Jeffrey Halley, senior market analyst at OANDA.
Reuters reports that the U.S. president’s move was cheered as it would restore unemployment benefits to millions of Americans and avert a federal government shutdown.
Global shares climbed on Monday after Trump signed into law the pandemic aid package, backing down from his earlier threat to block the bipartisan bill.
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 mobility restrictions being reimposed, fuelling concern over demand recovery.
The oil market will take cues from the virus situation as it develops in coming days, market watchers said.
“With the world now urgently launching mass vaccination programmes, the near-term fate for oil market might be how quickly vaccines can close the gap in the race to contain the new variant,” Stephen Innes, chief global market strategist at Axi, said in a note.
“Any complication on the pandemic front, whether its vaccine logistical, or lockdown related, could be met with more selling as January oil demand is on less solid footings, especially if the virus situations worsen more than anticipated post-holiday, ultimately handcuffing lawmakers.”