Oil extended gains Friday morning with expectations for more U.S. stimulus stoking optimism already buoyed by Saudi Arabia’s unilateral plan to cut output.
Futures in New York rose as much as 2% before easing off the high, while Brent oil topped $55 a barrel for the first time since February. Saudi Arabia’s pledge earlier this week to cut production by 1 million barrels a day in February and March added vigor to the rally, while Democrat gains in the U.S. Senate spurred broader markets higher in expectation of additional stimulus.
“Expectations of a $2,000 stimulus check for everybody is boosting the outlook and assets more generally,” said Michael Lynch, president of Strategic Energy & Economic Research. “It encourages people to believe the economic recovery will be stronger, that you’ll see more spending, more activity and more oil demand as a result.”
- Brent for March settlement advanced $1.02 to $55.40 a barrel as of 10:42 a.m. in New York
- West Texas Intermediate for February delivery rose 75 cents to $51.58 a barrel
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