Oil prices inched up on Thursday during thin holiday trading, supported by expectations of additional fiscal stimulus in China and a projected decline in U.S. crude inventories.
Brent crude futures gained 13 cents, or 0.2%, to $73.71 per barrel by 0650 GMT, while U.S. West Texas Intermediate (WTI) crude rose 0.2%, or 11 cents, to $70.21 per barrel, compared to Tuesday’s pre-Christmas settlement.
The rise in prices follows news that China, the world’s largest oil importer, plans to ramp up fiscal support for its economy in 2025. According to a Tuesday announcement from the Chinese Ministry of Finance, the government intends to increase pensions, medical insurance subsidies, and trade-in programs for consumer goods. Additionally, China has agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds to stimulate the economy.
“Crude oil prices have risen this week, driven by the announcement of a 3 trillion yuan fiscal stimulus to support China’s struggling economy,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “The expected drop in U.S. crude oil inventories, signaling strong demand, has also been a key factor in supporting prices.”
Market sentiment is also being buoyed by expectations of stronger fossil fuel production and demand under U.S. President-elect Donald Trump’s administration, which is set to take office next month.
An extended Reuters poll indicated that U.S. crude inventories are expected to have fallen by approximately 1.9 million barrels during the week ending December 20. Gasoline and distillate stocks are anticipated to have decreased by 1.1 million barrels and 0.3 million barrels, respectively.
U.S. crude oil and distillate stocks showed declines last week, according to market sources who cited figures from the American Petroleum Institute (API). The U.S. Energy Information Administration (EIA) is scheduled to release its official data at 1 p.m. EST (1800 GMT) on Friday.
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