Oil Market Sees 3% Boost as China Stimulus and US Crude Draw Shape Outlook
Oil prices rose slightly on Friday due to improved demand from China, the world’s largest oil importer. The increases were forecasted to reflect anticipated stimulus policies to boost the frail Chinese economy. According to a report from Reuters, the authorities in China have signaled signs of launching special treasury bonds worth 3 trillion yuan ($411 billion) in the next year.
The World Bank has also adopted new figures for the Chinese economic growth in 2024 and 2025. However, low consumer and business confidence could slow other recovery attempts, a point that analysts pointed out. These occurrences have raised optimism about enhanced oil demands in the region.
US Inventory Draws Add Momentum
US crude oil stocks also aided in pushing the prices up. According to market sources, the American Petroleum Institute lowered its estimate of crude inventories by 3.2 million barrels in the preceding week. This figure exceeds the 1.9 million-barrel decline predicted by analysts in the Reuters poll. Brent crude futures increased to $73.30 per barrel, up 4 cents, while West Texas Intermediate increased by 19 cents to $69.81.
UBS analyst Giovanni Staunovo pointed out that the expectation of lower inventories in the US could be a factor pushing prices up. Moreover, low temperatures in the territories of many states for several months may lead to increased oil consumption and price support.
Dollar Strength Caps Further Gains
However, while oil prices increased in China and the US, oil price gains were tempered by the appreciation of the US dollar. The US dollar remains strong on expectations of higher economic growth under the new US president’s administration, making oil expensive for holders of other currencies.
This has emphasized currency strength as a parameter that helps reign in rising steepness in the oil market. With the inventory data from the US Energy Information Administration expected later in the day, the industry has focused keenly on the actual inventory draw as projected.
