Oil up on hopes of recovery in demand

Oil up on hopes of recovery in demand

Oil gained more ground on Wednesday as a U.S. coronavirus fiscal aid package and a decline in crude oil inventories lifted prices.

Brent crude futures rose 19 cents, or 0.4%, to $51.28 a barrel, by 0255 GMT and WTI crude rose 29 cents, or 0.6%, to $48.29.

The dollar fell to its lowest in more than two years against the euro as currency traders looked past a new delay in U.S. stimulus cheques and maintained bets that additional financial aid was still likely, Reuters reported.

The Democrat-led U.S. House of Representatives voted to meet President Donald Trump's demand to increase direct COVID-19 aid payments to Americans hurting from the pandemic to $2,000.

Asian shares retreated as investors cashed in on a recent rally, while the euro flirted with highs not seen in more than 2-1/2 years on as hopes of a gradual global economic recovery. 

Oil prices could gain strength as vaccination programmes around the world begin next year, allowing countries to relax restrictions on movement and business activity.

U.S. physical crude oil grades strengthened on Tuesday as the API reported a decline in stockpiles, dealers said.

Crude oil stocks fell by 4.8 million barrels last week to about 492.9 million barrels, exceeding analysts' expectations in a Reuters poll for a draw of 2.6 million barrels, data from API showed.

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