Oil futures edged lower Monday, fading after getting an early boost following President Donald Trump’s decision over the weekend to reverse course and sign legislation that includes $900 billion in aid to consumers and small businesses.
West Texas Intermediate crude for February delivery CL.1, -1.18% CLG21, -1.18% fell 39 cents, or 0.8%, to $47.85 a barrel on the New York Mercantile Exchange, after trading as high as $48.96. February Brent crude BRNG21, -0.76%, the global benchmark, was off 23 cents, or 0.4%, at $51.06 a barrel on ICE Futures Europe.
The early rally “faded in the face of an expected holiday spike in COVID-19 misery, and the seemingly imminent approval of another 500,000 [barrels a day] of OPEC+ crude oil at the January 4 monthly meeting,” said Robert Yawger, director of energy at Mizuho Securities, in a note.
The U.S. case tally has topped 19 million, and health experts warned the next few weeks will be hard after millions of Americans traveled over the Christmas holiday.
“The $600 check most Americans will receive as part of the stimulus deal will struggle to overcome demand destruction from a Christmas/New Year increase in COVID cases and deaths,” he said.
Trump, who had blindsided investors and lawmakers last week by blasting the $900 billion stimulus package and demanding that $600 checks to households be increased to $2,000, changed course late Sunday to sign the legislation. The package includes $1.4 trillion to fund government agencies through September, averting a government shutdown.
Meanwhile, January natural-gas futures NGF21, -7.78% plunged nearly 9% to $2.297 per million British thermal units, contributing to a month-to-date decline of more than 20%. Natural gas fell last week after a smaller-than-expected drop in storage levels, analysts said.
January gasoline futures RBF21, -0.75% fell 0.5% to $1.3721 a gallon, while January heating oil HOF21, -0.63% was down 0.7% at $1.4801 a gallon.
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