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Oil Prices Still Resistant While U.S. Discussing Stimulus Plan

Oil prices changed course early in the day in the green following last week’s announcement of a big rise in U.S. crude inventories. U.S. light crude oil (WTI) eventually held up well, yielding 0.2% to $45.52 per barrel for the January Nymex contract, while the January delivery Brent contract ended nearly flat (-0.04%) $48.86.

Domestic oil inventories for the week ended December 4 jumped 15.2 million barrels to 503.2 million barrels, according to the Department of Energy, while the consensus was for a decrease of 1 million barrels. Gasoline stocks have risen by 4.2 million barrels (compared to the 2 million barrels increase forecast by the market); while U.S. distillate inventories have increased by 5.2 million barrels compared to the previous week, compared to an expected increase of 0.9 million barrels.

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Gold fell 1.92% to $1,838.50. Against a basket of six benchmark currencies, the dollar index rose 0.1 percent to 91.04 points.

In Washington, speculation persists about the prospect of implementing a new support package, planned for the end of next week for the Covid-19 crisis prior to the end of the current parliament. Two projects of almost the same amount are now under discussion: the first, worth $908 billion, was tabled by the Democratic and Republican Senators’ bipartisan committee last week. The second project, worth $916 billion, was introduced by Treasury Secretary Steven Mnuchin on Tuesday.

The “progress” in the talks has been praised by House Democratic Leader Nancy Pelosi and Senate Democratic Leader Chuck Schumer, but Senate Republican President Mitch McConnell, whose support for a new strategy is important, has yet to embrace a plan as he continues to champion his own $500 billion minimalist plan.

Time is running out, and without a vote on a new support package by the end of the legislature (on 18 December in principle), several services will end on 31 December to aid Americans in the face of the coronavirus pandemic, depriving 12 million people of unemployment benefits. The failure to approve a new package to be introduced to the new Congress in January is at least a month old, but legislation is not expected to be enacted until the inauguration of President-elect Joe Biden on January 20.

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