Oil Hits One-year Peak On US Winter Storm

A US snowstorm pushed oil prices to pre-pandemic levels Tuesday as global stocks extended rallies on hopes for more US fiscal stimulus.

Silver prices sank by nine percent to $26.78 an ounce after spiking the previous day to an eight-year peak on social media-driven demand.

Stock indices fired up as investors got back in the saddle and snapped up bargain shares after last week's global rout, which was fueled in part by the social media campaign to buy heavily shorted stocks that traders believe has petered out.

There is "relief that, at least for the time being, that the raid on short sellers has been thwarted," said Quincy Krosby, chief market strategist at Prudential Financial.

In New York, the Dow closed up 1.6 percent.

Meanwhile, oil prices surged on the back of upbeat market sentiment and a snowstorm that socked the northeastern United States.

US benchmark West Texas Intermediate oil soared to one-year high of around $55.07 a barrel, while Brent North Sea crude hit $57.77, a level last reached nearly a year ago.

"Oil prices powered higher... lifted in part by the positive sentiment returning to equity markets, but mostly because of frigid weather sweeping the United States, pushing up the demand for heating," said OANDA analyst Jeffrey Halley.

The rebound marked a stunning turnaround for the crude market, which briefly turned negative last year as the deadly Covid-19 outbreak shuttered economies worldwide and caused a supply glut that sent traders scrambling.

BP shares nonetheless tanked by 4.5 percent after the energy group said it suffered a net loss of $20.3 billion last year due to the pandemic.

Exxon Mobil gained 1.6 percent after reporting both fourth-quarter and full-year losses but unveiling new cost-cutting efforts, a low-carbon business unit and a new board member.

On the US stimulus front, President Joe Biden's spokeswoman affirmed on Monday that the White House planned to press for passage of its $1.9 trillion recovery plan.

Republicans have balked at the amount, and on Monday Biden met with a group of 10 lawmakers who have proposed a $600 billion plan that includes smaller handouts to taxpayers and no provision for state and local governments, which Democrats are likely to reject.