2021.01.2609:23:00UTC+00Oil Extends Gains In Cautious Trade

Oil prices edged higher on Tuesday to extend gains from the previous session amid expectations of a drop in crude supplies and bullish news coming from the OPEC front.

The upside was capped by rising coronavirus cases and renewed concerns over the passage of a U.S. stimulus package.

Brent crude for April settlement rose 17 cents, or 0.3 percent, to $55.85 a barrel, while U.S. crude futures were up 22 cents, or 0.4 percent, at $52.99 a barrel. Both contracts gained around 1 percent in the previous session.

Tanker tracker Petro-Logistics stated on Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies' compliance with crude output curbs is averaging 85 percent in January so far compared to 75 percent in December.

"The biggest reductions in January supply are expected from Libya, Iraq, and Nigeria," it was said.

India's crude oil imports rose to their highest level in over two years in December as easing of most of the coronavirus-led restrictions boosted economic activity, government data showed on Monday.

British bank Barclays raised its 2021 oil price forecasts, but cautioned that emerging risks from growing coronavirus cases in China and the fading of such transitory factors could lead to near-term pullbacks.

On the stimulus front, U.S. President Joe Biden said he's open to negotiations on his $1.9 trillion Covid-19 relief proposal, but didn't rule out pursuing a Democrat-only route for passage.

U.S. Senate Majority Leader Chuck Schumer said earlier Monday an aid package was unlikely before mid-March, just when jobless benefits from the last package will be running out.