Trading
Oil heads for weekly gain on China stimulus hopes
Global Banking & Finance Review®
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By Alex Lawler
LONDON (Reuters) -Oil rose slightly on Friday and was on track for a weekly gain, spurred by expectations of a stimulus-driven economic recovery in China, the world’s biggest oil importer, and by forecasts of lower U.S. inventories.
Analysts polled by Reuters had expected U.S. crude stocks to have declined by about 1.9 million barrels last week and market sources said the American Petroleum Institute put the decline at 3.2 million barrels.
Brent crude futures were up 4 cents at $73.30 a barrel by 0912 GMT. U.S. West Texas Intermediate crude was at $69.81, up 19 cents from Thursday’s close. For the week Brent was up 0.5% and WTI 0.4%.
“Probably we are moving back up again in anticipation of a crude draw in the U.S,” said UBS analyst Giovanni Staunovo. “Some support for oil might come soon from cold weather supporting demand.”
The U.S. Energy Information Administration’s official weekly inventory report is due at 1 p.m. EST (1800 GMT), later than normal because of the Christmas holiday.
Optimism over Chinese economic growth and oil demand was buoyed on Thursday by the World Bank raising its forecast for Chinese economic growth in 2024 and 2025, but it said that subdued household and business confidence would continue to weigh next year.
Chinese authorities have agreed to issue special treasury bonds worth 3 trillion yuan ($411 billion) next year, sources told Reuters this week, as Beijing acts to revive the sluggish economy.
However, a stronger U.S. dollar capped oil price gains. The U.S. currency has been boosted by expectations that the incoming Donald Trump administration’s policies will boost growth and lift inflation.
A stronger dollar makes oil more expensive for buyers holding other currencies.
(Reporting by Alex Lawler and Sudarshan VaradhanEditing by David Goodman)
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the ground and refined into various products, including gasoline, diesel, and other petrochemicals.
U.S. crude stocks refer to the total amount of crude oil stored in the United States. These stocks are monitored to gauge supply levels and can influence oil prices based on changes in inventory levels.
The American Petroleum Institute (API) is a national trade association that represents the oil and natural gas industry in the United States. It provides statistical data, industry standards, and advocacy for its members.
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