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Oil prices rise on expected economic recovery, likely drawdown in oil stocks

Oil prices rise on expected economic recovery, likely drawdown in oil stocks
March 9, 2021

SINGAPORE (Reuters) - Oil prices rose on Tuesday on expectations of a recovery in the global economy after the US Senate approved a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventories in the United States, the world’s biggest fuel consumer.

But a stronger dollar and receding fears of a supply disruption from Saudi Arabia, the world’s biggest oil exporter, after an attack on its export facilities capped price gains.

Brent crude futures for May rose by 53 cents, or 0.8 %, to $68.77 a barrel by 0436 GMT, while U.S. West Texas Intermediate (WTI) crude for April rose 44 cents, or 0.7%, to $65.49.

“Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy,” Stephen Innes, chief global markets strategist at Axi said in a note.

On Monday, Brent crude oil prices rose above $70 a barrel after Yemen’s Houthi forces fired drones and missiles at the heart of the Saudi oil industry, including a Saudi Aramco facility at Ras Tanura vital to petroleum exports.

Still, the United States expressed alarm at “genuine security threats” to Saudi Arabia from Yemen’s Iran-aligned Houthis and elsewhere in the region, and said it would look at improving support for Saudi defences.

The attacks came after the Organization of the Petroleum Exporting Countries (OPEC), Russia and their oil producing allies, known as OPEC+, agreed last week agree on broadly sticking with output cuts despite rising crude prices.

Investor focus, meanwhile, remains on the prospects for a global economic recovery.