By Gina Lee
Investing.com – Oil was up, rising more than $1 on Monday morning in Asia thanks to growing optimism about the global economic recovery from COVID-19. Increased prospects of a huge U.S. stimulus package and the country’s approval of a third COVID-19 vaccine also raised fuel demand recovery hopes.
Brent oil futures rose 1.72% to $65.53 by 10:54 PM ET (3:54 AM GMT), and the April contract expired on Feb. 26. WTI futures gained 1.71% to $62.55.
“Oil prices are recovering this morning in line with most risk assets on the back of the U.S. stimulus bill passing the House and as central banks continue to sabre rattle to ward off market-implied financial tightening,” Axi chief global markets strategist Stephen Innes said in a note.
The $1.9 trillion stimulus package proposed by U.S. President Joe Biden was passed by the House of Representatives over the weekend, with the bill now under debate in the Senate.
Further positive news came out of the U.S., after the Food and Drug Administration approved the Johnson & Johnson (NYSE:JNJ) COVID-19 vaccine candidate for emergency use over the weekend. The addition of a third vaccine to the country’s vaccine rollout arsenal is sure to boost inoculation efforts, with more than 20 million doses of the vaccine expected to be shipped by the end of the month and 100 million doses by the middle of 2021.
In Asia, there were also signs of a rebound in Asian growth. Data released earlier in the day showed that Japan’s manufacturing purchasing managers’ index (PMI) was 51.4 in February, above the 50.6 predicted in Investing.com forecasts and January’s 49.8 figure.
Investors are now looking to a meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+) to take place during the week, for further clues on whether supply will return to the market.
“More supply needs to come onto the market to ensure OPEC+ meets incremental demand and keeps internal discipline ducks in a row,” Axi’s Innes added.