Oil price rise: US Senate approves $1.9 trillion bill

Oil price rise: US Senate approves $1.9 trillion bill

On Tuesday, Oil prices rose on expectations of a recovery in the global economy after US Senate approval of a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventory in the United States.

The price of Brent Crude has been on an upswing since October. Now it futures for May rose by 32 cents, or 0.5%, to $68.56 a barrel by 0125 GMT. On the other hand, US West Texas Intermediate (WTI) crude for April rose 19 cents, or 0.3%, to $65.24.

The chief global markets strategist at Axi, Stephen Innes, said in a note, “Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy.”

He further added, “Brent is currently holding up above $68, suggesting speculators are likely dipping their toes back in after yesterday’s chaos.”

On Sunday, Saudi Arabia, one of the largest producers of oil, revealed that the world’s largest crude oil exporting facility, Ras Tanura was attacked by Yemen’s Houthi forces. The Houthi rebels fired drones and missiles at the heart of the Saudi oil industry.

On Monday, the price of Brent crude increased due to the security concerns around Saudi Arabia’s oil fields.  It went above $70 a barrel.

No casualties or loss of property were reported by Riyadh. However, the United States expressed alarm at “genuine security threats” to Saudi Arabia from Yemen’s Iran-aligned Houthis. US said that it would look at improving support for Saudi defences.

These attacks by the rebels were conducted after the Organization of the Petroleum Exporting Countries, Russia and their oil producing allies agreed on broadly sticking with output cuts despite rising crude prices.

Meanwhile, the Investor focus remains on the prospects for a global economic recovery.

On Monday, a preliminary Reuters poll showed that last week US crude oil and refined product stockpiles fell with distillate inventories drawing down for fifth straight week.

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