Stimulus package to boost US economy and increase oil demand
Crude oil prices were up at trade opening on Wednesday with optimism that the $2 trillion aid package to stimulate the American economy would increase crude demand in the world’s largest oil consuming country.
International benchmark Brent crude was trading at $27.85 per barrel at 0615 GMT for a 2.57% increase after closing Tuesday at $27.15 a barrel.
American benchmark West Texas Intermediate was at $24.86 a barrel at the same time for a 3.54% gain after ending the previous session at $24.01 per barrel.
The White House and the U.S. Senate leaders reached a deal late Tuesday on a stimulus bill to mitigate the adverse effects of coronavirus on the economy.
While the bill failed to pass the Senate on Monday, it is expected to give a major boost to the American economy if it clears the floor later Wednesday.
As the world’s largest economy faces the risk of a recession, the stimulus package would increase crude oil demand in the U.S., and push crude prices higher.
Last week oil prices hit their lowest levels in around 17 years as the coronavirus pandemic continues to weaken global oil demand, and with Saudi Arabia and Russia due to increase their crude oil production from the beginning of April.