WTI Crude futures climbed 26 cents, to $53.24 a barrel, 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 Jo Biden 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 lock downs 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 weeks. The country is experiencing its most severe Covid-19 outbreak since March 2020 ahead of the key Lunar New Year holiday season. More than 20 provincial-level regions have asked people to stay put during the holiday. Germany on Tuesday extended a lock down for most shops and schools for another two weeks, to Feb. 14.

Traders will be watching out for U.S. crude and products inventory data due from the American Petroleum Institute on Wednesday and from the Energy Information Administration on Friday. Six analysts polled by Reuters estimated, on average, that crude stocks fell by 300,000 barrels in the week to Jan. 15, but expect gasoline stockpiles rose by 3.0 million barrels. Distillate inventories, which include diesel, heating oil and jet fuel, were seen up by 800,000 bbl.

Brent Crude for March delivery rose $1.15, or 2.1%, to settle at $55.90 per barrel, while WTI Crude settled 62 cents, or 1.18%, higher at $52.98 per barrel.

Wall Street’s main indexes rose after upbeat earnings from big U.S. banks and comments from U.S. Treasury Secretary nominee Janet Yellen ahead of Biden’s inauguration on Wednesday. Yellen urged lawmakers to “act big” on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden. “As we are approaching the beginning of the Biden administration era in the U.S., traders now have their hopes up for a rapid positive effect on markets coming from the promised ($1.9 trillion) stimulus package,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.

Investors were also upbeat on demand in China, the world’s top crude oil importer, after data showed its refinery output rose 3% to a record high in 2020. Halliburton Co, meanwhile, predicted a recovery in the global oil and gas industry from the second quarter after the oilfield services provider beat profit estimates on cost cuts and modest gains in activity following last year’s slump.

And OPEC’s secretary general said he was cautiously optimistic the oil market would recover this year from the slump in demand brought about by the coronavirus pandemic. Crude prices rose even though the International Energy Agency (IEA) cut its outlook for oil demand in 2021 but pointed to a recovery in the second half of the year to an annual average of 96.6 million barrels per day.

Brent Crude fell $1.32, or 2.34%, to settle at $55.10 per barrel, after gaining 0.6% on Thursday. WTI Crude settled $1.21, or 2.26%, lower at $52.36 per barrel, having risen more than 1% the previous session. Both benchmarks, which hit their highest in nearly a year earlier in the week, were are heading for their first weekly declines in three weeks.

While producers are facing unparalleled challenges balancing supply and demand equations with calculus involving vaccine rollouts versus lockdowns, financial contracts have been boosted by strong equities and a weaker dollar, which makes oil cheaper, along with strong Chinese demand. These positives were called into question on Friday as the dollar rose and China ramped up lockdown measures. A nearly $2 trillion COVID-19 relief package in the United States unveiled by President-elect Joe Biden may increase oil demand from the world’s biggest crude consumer. Still, some analysts said the move may not be enough to stoke demand. “In terms of being able to talk about demand, Asia was the only brightspot,” said John Kilduff, Partner at Again Capital Management in New York. “This renewed lock down is striking at the heart of the demand picture in Asia. It’s trouble.”

“The COVID-19 pandemic’s spread is taking centre stage again and traders are getting increasingly worried about the long duration of European lockdown and about the new restrictions (in) China,” Bjornar Tonnage from Rystad Energy said. “The market is structurally bullish, but it may be getting too ahead of forward-looking fundamentals.”

WTI Crude settled 1 cent higher at $52.25 per barrel. International benchmark Brent Crude fell 33 cents, or 0.6%, to settle at $55.66 per barrel.

“The renewed concerns about demand due to very high numbers of new corona cases and further mobility restrictions, plus the stronger U.S. dollar, are generating selling pressure,” Commerzbank analyst Eugen Weinberg said. Worldwide coronavirus cases surpassed 90 million, according to a Reuters tally. Despite strict national lock downs, Britain is facing the worst weeks of the pandemic, and in Germany cases are still rising. Mainland China saw its biggest daily increase in virus infections in more than five months, authorities said, as new infections rose in Hebei, which surrounds the capital, Beijing. In Shijiazhuang, the provincial capital and epicentre of the new outbreak, people and vehicles are barred from leaving, as authorities seek to rein in the spread.

A stronger dollar, supported by hopes for more stimulus to boost the world’s largest economy, also weighed on oil prices. Oil is usually priced in dollars, so a stronger dollar makes crude more expensive for buyers with other currencies. Monday’s losses follow a strong week for oil prices. Brent and WTI rose almost 8% last week, supported by Saudi Arabia’s pledge for a voluntary oil output cut of 1 million barrels per day (bpd) in February and March as part of a deal for most OPEC+ producers to hold production steady. “Although oil prices are declining today, the Saudi move is still keeping them at quite high levels,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets. “Today the correction is not massive, rather a logical adjustment caused by some bearish demand signals and by a strengthening U.S. dollar.”

The Saudi cut is expected to bring the oil market into deficit for most of 2021 even though lockdowns are hitting demand, analysts said. Brent could rise to $65 per barrel by summer 2021, Goldman Sachs said, driven by Saudi cuts and the implications of a shift in power to the Democrats in the United States.

The pandemic claimed its highest U.S. death toll yet this week, killing more than 4,000 people in a single day, while China reported the biggest rise in daily cases in more than five months and Japan may extend a state of emergency beyond the greater Tokyo region.

A global equities rally pushed Japan’s Nikkei and U.S. stock benchmarks to new records, as investors focused on further stimulus to mend the economic damage of the pandemic. The U.S. Congress may soon approve more pandemic relief, a scenario that became more likely after two Georgia Democrats won Senate seats that handed Democrats control of both houses of Congress once Biden is sworn in.

“The energy complex (is) placing particular focus on the democratic victories in the Georgia elections that, in turn, boost the likelihood of larger stimulus measures,” said Jim Ritterbusch of Ritterbusch and Associates.