Oil futures rose Monday, getting a boost after President Donald Trump reversed course and signed legislation that includes $900 billion in aid to consumers and small businesses.
West Texas Intermediate crude for February delivery rose 19 cents, or 0.4%, to $48.40 a barrel on the New York Mercantile Exchange. February Brent crude, the global benchmark, was up 40 cents, or 0.8%, at $51.74 a barrel on ICE Futures Europe.
“It was a very impressive rally on oil markets as traders’ price in the front-loaded stimulus effect with both [direct checks to households] and unemployment checks spent quickly that could bridge oil over the early Q1 demand gap until the vaccines are more widely distributed globally,” said Stephen Innes, chief global markets strategist at Axi, in a note.
Trump, who had blindsided investors and lawmakers last week by blasting the $900 billion stimulus package and demanding that $600 checks to households be increased to $2,000, changed course late Sunday to sign the legislation. The package includes $1.4 trillion to fund government agencies through September, averting a government shutdown.
Brent, however, ran out of steam at $52 a barrel, Innes noted, on concerns that higher prices would prompt OPEC to bring more barrels back to the market.
January natural-gas futures plunged more than 9% to $2.28 per million British thermal units, contributing to a month-to-date decline of more than 20%. Natural gas fell last week after a smaller-than-expected drop in storage levels, analysts said.
January gasoline futures rose 1% to $1.3864 a gallon, while January heating oil was 0.9% higher at $1.5037 a gallon.