WASHINGTON (DTN) -- After trading sideways for most of the session Wednesday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange chased equities higher in market-on-close trade amid breaking news that the U.S. House of Representatives passed the Senate version of President Joe Biden's $1.9 trillion stimulus bill, with Biden expected to sign the bill into law later this week.
On the session, West Texas Intermediate for April delivery advanced 43 cents to settle at $64.44 barrel (bbl) and Brent May crude gained 38 cents to $67.90 bbl. NYMEX April ULSD futures added 1 cent to $1.9173 gallon and front-month RBOB futures rallied 2.93 cents for a $2.0795 gallon settlement.
The Dow Jones Industrial Average soared more than 500 points and the dollar index retreated below the key 92 level after the latest stimulus package in response to the pandemic spurred investor enthusiasm for a faster economic recovery. The U.S. economy, while growing, is still contending with a high level of unemployment. Much of the legislation that passed Congress on Wednesday mirrors the plan proposed by Biden in January, although an increase in the federal minimum wage to $15 hour was pulled and eligibility requirements for those receiving stimulus checks was tightened. The bill also includes a $300 week boost to unemployment benefits to be paid by the federal government as well as rental assistance for low income households.
"This legislation is about giving the backbone of this nation -- the essential workers, the working people who built this country, the people who keep this country going -- a fighting chance," Biden said in a statement Wednesday.
The bill is expected to be signed into law on Friday at the White House. Of note, the package also includes $15 billion to the Emergency Disaster Loan program and the second extension of Paycheck Protection Program which businesses and unions call critical to keeping workers on the job. United Airlines estimates the relief bill would save at least 27,000 airline workers from furloughs that were slated to start in just weeks.
Wednesday's gains in the oil futures were underpinned by hopes that employment gains and robust economic activity would spur demand for refined fuels in the second and third quarters. Energy Information Administration inventory data released Wednesday showed implied gasoline demand jumped by 578,000 barrels per day (bpd) last week to 8.7 million bpd -- the highest level in four months and just 8% below pre-COVID levels. Distillate demand, meanwhile, surged to the highest weekly demand rate since January 2019 at 4.487 million bpd.
The increase comes as Texas officially lifted coronavirus restrictions Wednesday, including a mask mandate. The Lone Star state is now the 16th state without a mask requirement and Wyoming becomes the 17th state next week. Alabama ends its mask rule in early April.
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