Oil prices climbed with U.S. stock markets on Tuesday ahead of Joe Biden's inauguration as U.S. president on optimism that more government stimulus will eventually lift global economic growth.
Brent futures for March delivery rose $1.15, or 2.1%, to settle at $55.90 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 62 cents, or 1.2%, to settle at $52.98. Front-month February WTI futures expire on Wednesday.
Wall Street's main indexes rose after upbeat earnings from big U.S. banks and comments from U.S. Treasury Secretary nominee Janet Yellen ahead of Biden's inauguration on Wednesday.
Yellen urged lawmakers to "act big" on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden.
"As we are approaching the beginning of the Biden administration era in the U.S., traders now have their hopes up for a rapid positive effect on markets coming from the promised ($1.9 trillion) stimulus package," said Rystad Energy's head of oil markets, Bjornar Tonhaugen.
Investors were also upbeat on demand in China, the world's top crude oil importer, after data showed its refinery output rose 3% to a record high in 2020.
Halliburton Co, meanwhile, predicted a recovery in the global oil and gas industry from the second quarter after the oilfield services provider beat profit estimates on cost cuts and modest gains in activity following last year's slump.
And OPEC's secretary general said he was cautiously optimistic the oil market would recover this year from the slump in demand brought about by the coronavirus pandemic.
Crude prices rose even though the International Energy Agency (IEA) cut its outlook for oil demand in 2021 but pointed to a recovery in the second half of the year to an annual average of 96.6 million barrels per day.
(Additional reporting by Shadia Nasralla in London and Florence Tan in Singapore; Editing by Marguerita Choy and David Goodman)
