09.02.202109:25:00UTC+00Oil Extends Rally On Optimism Over Demand Recovery

Oil prices reached 13-mongh highs on Tuesday supported by Saudi production cuts, optimism over demand recovery and expectations for a U.S. stimulus package.

Brent crude for April settlement edged up 0.2 percent to $60.85 after having hit as high as $61.27 earlier in the day. WTI crude futures were up 0.4 percent at $58.17.

Both Brent and WTI crude oil prices returned to their pre-pandemic levels, mainly with the help of Saudi Arabia's decision last week to deliver a surprise cut of 1 million barrels a day in its crude production.

There is optimism over fuel demand recovery as Covid-19 vaccines allow the global economy to open up and enable more traveling.

On the stimulus front, U.S. House Democrats released a draft of stimulus plan on Monday evening, which includes $1,400 stimulus checks, $400 federal unemployment benefits, funding to state and local governments and vaccine distribution among other provisions.

Democrats are rushing to put the stimulus plan for a floor vote by the end of the month. Thereafter, the bill would go to the Senate for approval.