The Daily Dose; Oil rallies on act-big sentiment

-Yellen says go big or go home on stimulus

-IEA sees lackluster demand prospects

The market largely ignored the lackluster report from the IEA and concerns about violence in the United States, instead focusing on prospects for further stimulus from the incoming Biden administration. The rally was further supported by an upbeat assessment form Halliburton, which said it expected activity in the energy space to improve throughout 2022. The U.S. sector, however, could be facing bottlenecks given the incoming administration’s stance on oil pipelines.

Coming off the federal holiday in the United States, crude oil prices bounced into the week on a general upbeat sentiment about political events. The price for Brent crude oil was up 2% as of 3 p.m. ET to trade at $55.87 per barrel.

Go big or go home. That was the word Tuesday from Treasury Secretary-elect Janet Yellen. Her comments followed weekend details of a $1.9 trillion stimulus package unveiled by President-elect Joe Biden, a package that would include $1,400 payouts to individual taxpayers. That would come on top the of $600 already distributed by the Trump administration.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen said. “But right now, with interest rates at historic lows, the smartest thing we can do is act big.”

The market favored that over a report from the International Energy Agency that saw growth in global oil demand for 2021 wouldn’t offset the 8.8 million bpd collapse from last year. A stubborn pandemic that’s claimed more than 2 million lives globally will slow any meaningful recovery in the short term, though the IEA said it expected an acceleration in global economic activity to run parallel to vaccine distribution.

Taking a hefty loss on the year, oilfield services company Halliburton said its performance during the fourth quarter was at least even with the previous period. Latin and North American revenue drove the gains for the company, particularly in the shale basins in the Lower 48 U.S. states.

“I am optimistic about the activity momentum I see in North America, and expect international activity to bottom in the first quarter of this year,” top brass Jeff Miller said in a statement.

That momentum could face bottlenecks, however. President-elect Joe Biden said he’d pull the plug on the long-awaited Keystone XL oil pipeline almost immediately. Transportation Secretary-elect Pete Buttigieg, for his part, has called for the closure of Line 5, a 60-year-old system running through the narrow waterway that separates Michigan’s two peninsulas.


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