Oil rose to hit $52/bbl on Dec. 28 as U.S. President Donald Trump's signing of a coronavirus aid package and the start of a European vaccination campaign outweighed concern about weak near-term demand.
After Trump backed down from a threat to block the package, Democrats on Dec. 28 will try to push through expanded $2,000 relief payments. Europe, meanwhile, launched a mass vaccination drive on Dec. 27.
Brent crude was up 45 cents, or 0.9%, at $51.74/bbl at 13:16 GMT, after trading as high as $52.02 and reversing an earlier decline. WTI, the crude benchmark in the U.S., added 59 cents, or 1.2%, to $48.82.
"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, analyst at broker OANDA.
Oil has recovered from historic lows hit this year as the emerging pandemic hammered demand. Brent reached $52.48 on Dec. 18, its highest since March.
But, the emergence of a new variant of the virus has led to movement restrictions being reimposed, hitting near-term demand and weighing on prices.
Oil remains vulnerable to any further setbacks in efforts to control the virus, said Stephen Innes, chief global market strategist at Axi, in a note.
Also coming into focus will be a Jan. 4 meeting of OPEC and allies, a group known as OPEC+.
The group is tapering record oil output cuts made this year to support the market.
OPEC+ is set to boost output by 500,000 bbl/d in January. Russian Deputy Prime Minister Alexander Novak said on Dec. 28 the deal could be adjusted if the market recovers more quickly than expected.
The move by Washington state to stop sales of gas-powered cars comes as efforts to boost adoption of electric vehicles are accelerating over concerns about fossil fuels’ contribution to climate change.
Supply discipline and rebounding economies are set to give oil a chance to break out of the recent range, Goldman Sachs analysts said in a report.
The IEA predicted global oil demand and supply were set to re-balance in the second half of the year and that producers may then need to pump 2 million bbl/d more to meet the expected demand.