Brent climbs as optimism over economy offsets demand fears

Brent crude futures rose on Tuesday as hopes that the government will support global economic recovery and oil demand offset worries about renewed lockdowns affecting fuel consumption.

Brent crude futures for March delivery were up 0.3%, or 17 cents, at $54.92 per barrel following a 35-cent slip in the last session. U.S. West Texas Intermediate crude dropped 0.2%, or 11 cents, at $52.25 per barrel. 

Investors were upbeat as Chinese demand grew and refinery output climbed 3% to a new record in 2020. 

Oil prices were also underpinned by Saudi’s pledge for more output cuts in the next two months. The cuts are expected to decrease global stocks by 1.1 million bpd in the first quarter.

Meanwhile, a surge in global coronavirus cases and renewed restrictions weighing on fuel demand capped oil prices.