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Oil gains after U.S. infrastructure bill, plans to address prices

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma. — Reuters
Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma. — Reuters

LONDON: Oil prices rose on Monday as positive signs for global economic growth supported the outlook for energy demand and the United States said it was weighing options to address high prices.

Brent crude was up by 70 cents, or 0.9%, at $83.44 a barrel at 1255 GMT, after dropping nearly 2% last week. U.S. oil gained 80 cents, or 1%, to $82.07, having declined almost 3% through Friday.

U.S. President Joe Biden on Saturday welcomed congressional passage of a long-delayed $1 trillion infrastructure bill, which may boost growth and demand for fuel.

Further supporting prices was a decision by the Organization of the Petroleum Exporting Countries and allies such as Russia, together known as OPEC+, not to speed up their planned production increases last week.

Biden had called on OPEC+ to produce more crude to dampen rising prices and on Saturday said his administration had "other tools" to deal with the higher price of oil.

U.S. Energy Secretary Jennifer Granholm said on Monday that Washington was weighing its options to address high gasoline and heating prices in the United States, which some analysts say could involve tapping the U.S. Strategic Petroleum Reserve.

"He wants to see added supply from all, but he's looking at other tools that he may have and hopefully there will be an announcement or so this week." Adding to bullish sentiment, China's export growth slowed in October but beat forecasts, buoyed by rising global demand ahead of the winter holiday seasons and improvements in coronavirus-hit supply chains.

Saudi Arabia late on Friday raised the price of its benchmark crude for customers in Asia in December, exceeding market expectations.

"Saudi Arabia also reckons that the next few weeks will be tight, this is why its official selling price to Asia was increased by $1.40 a barrel," said Tamas Varga, analyst at PVM Oil Associates, said.

Global demand for jet fuel also looks set to take off as more governments make air travel easier with reduced restrictions for coronavirus. — Reuters

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