Oil futures contracts closed lower this Thursday (26) in a session with little liquidity due to the year-end holidays, which also resulted in an empty agenda.
At the beginning of the session, the commodity advanced, especially with the possibility of Chinese stimulus to the economy boosting demand throughout the next year.
In turn, the movement is met with skepticism, as a series of signs show China losing its ability to lead the advance in oil purchases, with India taking on an increasingly greater role.
On the New York Mercantile Exchange (Nymex), WTI oil for February closed down 0.68% (US$0.48), at US$69.62 per barrel, while Brent for the same month, traded on Intercontinental Exchange (ICE), fell 0.43% (US$ 0.32), to US$ 73.26 a barrel.
“The news overnight centered on new Chinese stimulus,” says Scott Shelton of TP ICAP in a note. According to ReutersChinese authorities have agreed to issue three trillion yuan, or $411 billion, of special Treasury bonds next year, two sources said. If the value is confirmed, it will be a record.
The official Department of Energy (DoE) survey on American oil stocks, initially scheduled for today, has been postponed until tomorrow, when Baker Hughes will also update the number of wells and platforms in operation in the USA.
The DoE’s report of a 3.2 million barrel decline in U.S. crude oil inventories last week reflects year-end oil drilling trends, Shelton adds. “I expect an increase in crude oil inventories in the first quarter,” he projects.
The World Bank raised its economic growth projections for China for 2024 and 2025, with the argument that stimulus actions and strong export performance offset part of the adverse effects of the crisis on the real estate sector.
The institution now predicts a 4.9% increase in Chinese Gross Domestic Product (GDP) in 2024, slightly higher than the 4.8% increase expected in June.
For 2025, the growth expectation of the world’s second largest economy was revised upwards by 0.4 percentage points, from 4.1% to 4.5%. The changes were attributed to the strength of Chinese exports and recent monetary and fiscal easing moves, including support measures for the real estate sector.
*With information from Dow Jones Newswires.
