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Oil rise on hopes of U.S. stimulus, crude stocks drawdown on Wednesday

Oil prices rose on Wednesday, adding to solid gains overnight, on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks. U.S. West Texas Intermediate (WTI) crude futures climbed 37 cents, or 0.7%, to $53.35 a barrel at 0427 GMT, building on a 1.2% rise on Tuesday. Brent crude futures rose 35 cents, or 0.6%, to $56.25 a barrel, adding to a 2.1% gain on Tuesday. U.S. President-elect Joe Biden’s Treasury Secretary Nominee Janet Yellen urged lawmakers on Tuesday to “act big” on pandemic relief spending, reinforcing hopes of massive spending to boost growth. “Certainly the expectation is that will support better growth and better demand in the U.S.,” said National Australia Bank’s head of commodity research, Lachlan Shaw. However, the market remains concerned about near-term oil demand as the International Energy Agency cut its outlook for first-quarter oil demand by 580,000 barrels per day, due to tight lockdowns and border closures to stop soaring COVID-19 infections. China’s capital Beijing on Wednesday announced stricter COVID-19 control measures and will shut down a subway station after the city reported its biggest daily jump in new COVID-19 cases in more than three week.