Oil rose on Tuesday, for the third time in four sessions, on expectations for rising fuel demand as the United States may expand their pandemic aid payments and a final Brexit deal is set to stabilize trade between Europe and the UK.
Brent crude climbed 23 cents, or 0.5%, to $51.09 a barrel, as of 0410 GMT and US West Texas Intermediate (WTI) crude futures added 23 cents, or 0.5%, to $47.85 a barrel.
"Markets feel very rangy into the New Year but should find support today from broader risk markets as stocks are soaring on the prospects of larger stimulus checks," aid Stephen Innes, chief global market strategist at Axi, a broker.
"However, for oil markets gains could be limited due to the new Covid variant and OPEC meeting overhangs."
(Also read | Oil heads lower after seventh weekly gain on coronavirus mutation risk)
Crude rose along with a gains in Asian shares, with Japanese stocks hitting a 30-year high, on rising investor risk appetite as the US House of Representatives voted to raise pandemic relief payments to $2,000 from $600. The Senate still needs to vote on the measure.
Forecasts for tightening US crude oil stocks also added support to prices.
US crude oil stockpiles are expected to have declined last week, while refined products inventories likely rose, a preliminary Reuters poll ahead of this week's data showed on Monday.
Five analysts polled by Reuters estimated, on average, that crude stocks likely fell by 2.1 million barrels in the week to Dec. 25.
Still, concerns over coronavirus lockdowns are capping gains.
A new variant of the virus in the United Kingdom has led to the reimposition of movement restrictions, hitting near-term demand and weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa.
A Jan. 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, also looms over the market.
OPEC+ is tapering record oil output cuts made this year to support the market. The group is set to boost output by 500,000 barrels per day (bpd) in January and Russia supports another increase of the same amount in February.
(Also read | Oil drops as new coronavirus strain revives demand fears)
Russian Deputy Prime Minister Alexander Novak said on Monday he expected there would be 5 million to 6 million bpd additional oil demand in 2021, which has not fully recovered from the pandemic.
Money managers raised their net-long US crude futures and options positions in the week to December 21, the US Commodity Futures Trading Commission said on Monday. The speculator group raise its combined futures and options position in New York and London by 4,455 contracts to 325,787 during the period.
This story has been published from a wire agency feed without modifications to the text.