Brent is inching closer to $55 per barrel mark amid political uncertainty in the US, the world's largest producer of oil and gas, holding on to the gains on the back of Opec+ deepening production cuts on Tuesday.
The international benchmark rose as high as $54.86 per barrel during early trading. Brent slid marginally by 0.17 per cent trading at $54.21 per barrel at 6.41pm UAE time. West Texas Intermediate continued to rally above $50 and remained neatly flat at $50.61 per barrel.
Prices gained further after pro-Donald Trump protestors stormed Capitol Hill in Washington DC as the Congress was in session to certify President-Elect Joe Biden's win on Wednesday.
Protestors breached police cordon, ransacked offices and the Senate chamber, demanding to overturn the election results. However, stock markets rallied in spite of the Capitol Hill takeover that resulted in four deaths. Democrats took control of the Senate by winning the two Georgia Senate races, clearing the path for a larger pandemic stimulus for the US economy.
Amid the chaos seen in the US capital on Wednesday, the certification of Mr Biden as the 46th president of the US was reassuring to commodity and stock markets, said Stephen Innes, chief global market strategist at Axi.
The "real impact" however, was the outcome of the Georgia Senate run-off elections, which guaranteed the Democrats control of the upper chamber of the US Congress.
"Front-month WTI holding above $50 is the clearest signpost that a vaccine and stimulus-driven reflation trades are back on," said Mr Innes.
Crude prices are also holding on the gains from the two-day Opec+ meeting, which ended on Tuesday.
Saudi Arabia, the world's largest exporter, surprised the market with a voluntary commitment to cut 1 million barrels per day for February and March. The Opec+ group will be cutting back 7.2m bpd from the beginning of January, with Russia and Kazakhstan allowed to increase production.
The unilateral decision by Saudi Arabia came on the back of concerns about weakening global demand amid a rise in global Covid-19 infections and several European countries entering into strict lockdowns.
Opec+ agreed last month to bring 500,000 bpd back to the markets early this year. The group paused an earlier plan to bring 2m bpd of supply from the beginning of January.
"The first monthly Opec+ meeting to decide on the group’s production ended with a too good to be true outcome," said Ehsan Khoman, head of Mena research and strategy at MUFG Bank.
"Such a decision will keep global markets tight, offsetting weakening demand as mobility restrictions return to parts of Europe, and with it supporting oil prices," he added.
Swiss bank UBS sees Brent rallying further up to $60 per barrel by mid-year and trading as high as $63 per barrel in the second half of the year. WTI, which has gathered steam following the rollout of vaccines, is expected to trade at a $3 discount to Brent during the forecasted periods.
The price rally however, could be offset by increases in US output, which may rise following the sizeable reduction from Saudi Arabia.
"Key things to watch over the coming months are the response of US shale to higher prices, compliance rates among Opec+ players and Iranian production volumes," said Giovanni Staunovo, commodity analyst at UBS.