Futures contracts for oil closed higher this Friday (27), on a day that featured the release of weekly oil stocks in the United States.
The greater-than-expected drop gave a boost to prices, which rose despite the prospects for more stimulus in China’s economy.
The scenario ensured that the commodity ended the week with gains, after being pressured by the latest decision of the Federal Reserve (Fed) in the year, which .
On the New York Mercantile Exchange (Nymex), WTI oil for February closed up 1.41% (US$0.98), at US$70.60 per barrel, while Brent for the same month, traded on Intercontinental Exchange (ICE), advanced 1.24% (US$ 0.91), to US$ 74.17 a barrel.
During the week, there was an increase of 1.22% and 1.37%, respectively.
Oil stocks in the United States fell 4.237 million barrels to 416.779 million barrels in the week ending December 20, the country’s Department of Energy (DoE) reported today.
Analysts consulted by The Wall Street Journal predicted a milder drop of 1.1 million barrels. Distillate stock levels also fell, while gasoline levels rose, contrary to expectations.
Oil’s gains reflect market optimism surrounding a recovery in China’s crude oil demand, with government support measures expected to crystallize throughout 2025, writes XS.com’s Samer Hasn.
The most recent move was the approval of a 3 trillion yuan treasury bond offering next year, following monetary support packages and discussions on restructuring the social system, says Hasn.
On the other hand, the potential rekindling of trade wars between the US and China could drag demand and oil prices down.
The geopolitical risk premium resulting from simmering tensions in the Middle East that currently benefit prices will likely dissipate over time, he says.
The market’s focus should remain on China’s economic recovery and the recovery in global oil demand, he says.
