Oil prices rose in thin holiday trade, helped by expectations of additional fiscal stimulus from the Chinese government. Investors are also preparing for the publication of official data on oil reserves in the United States.
Earlier this week, the media reported that Chinese authorities are implementing a record-breaking 3 trillion yuan fiscal stimulus to boost their struggling economy.
Meanwhile, data from the American Petroleum Institute (API) showed that during the week ended Dec. 20 U.S. oil inventories fell by 3.2 million barrels. Gasoline inventories rose by 3.9 million barrels last week, while distillate inventories fell by about 2.5 million barrels. Overall, the latest data indicated healthy demand for oil, which supported prices. Meanwhile, an official report from the Energy Information Administration will be released tomorrow at 16:00 GMT, with consensus estimates suggesting that oil reserves decreased by 2 million barrels over the week, while gasoline and distillate stocks fell by 1.1 million barrels and 0.3 million barrels, respectively. Oil reserves usually decline in December, before building in the opening months of the new year.
Oil is preparing to record a slight decline in 2024, although prices have been limited to a narrow range since mid-October. Ahead of the new year, traders are studying the possible consequences of the upcoming Trump presidency, Beijing's efforts to support the economy, and the prospects for global crude oil supplies.