Oil prices rose on Monday, supported by optimism about Covid-19 vaccinations, a US stimulus package and growing factory activity in Europe despite coronavirus restrictions.

Brent crude was up $0.63, or 1%, at $65.05 a barrel by 1150 GMT and US West Texas Intermediate (WTI) crude jumped $0.62, or 1%, to $62.12 a barrel. Both contracts finished February 18% higher.

“The three major supportive factors are the prevalent vaccine rollouts, the optimism about economic growth and the view that the oil balance will get tighter as a result of the first two points,” PVM Oil Associates analyst Tamas Varga said.

Support also came from a $1.9 trillion coronavirus relief package passed by the US House of Representatives on Saturday.

If approved by the Senate, the stimulus package would pay for vaccines and medical supplies, and send a new round of emergency financial aid to households and small businesses, which will have a direct impact on energy demand.

The approval of Johnson & Johnson’s Covid-19 shot also buoyed the economic outlook. Manufacturing data from around the world was mixed.

China’s factory activity growth slipped to a nine-month low in February but German activity hit its highest level in more than three years and eurozone factory activity raced along thanks to soaring demand.

Organisation of the Petroleum Exporting Countries and allies, a group known as OPEC+, meet on Thursday and could discuss allowing as much as 1.5 million barrels per day (bpd) of crude back into the market.

ING analysts said OPEC+ needs to be careful to avoid surprising traders by releasing too much supply.

“There is a large amount of speculative money in oil at the moment, so they will want to avoid any action that will see (those investors) running for the exit,” the analysts said. 

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