Oil Closes Higher on Further Stimulus Measures From China and Heightened Geopolitical Risk
West Texas Intermediate (WTI) edged higher on Tuesday but firmly rangebound despite new stimulus measures from China and turmoil in Syria following the collapse of the Assad regime.
WTI crude oil for January delivery closed up US$0.22 to settle at US$68.59 per barrel, while February Brent crude was last seen up US$0.18 to US$72.32.
The rise comes a day after China, the No.1 importer, said it will loosen its monetary policy stance for the first time since 2010 as it looks to support a flagging economy burdened by a debt crisis in its real-estate sector, weak consumer spending and disinflation, cutting into oil demand growth from the country.
"Tentative bulls were emboldened by the remarks from the Chinese Politburo that the country will adopt an 'appropriately loose' monetary policy coupled with proactive fiscal policy next year. Of course, the devil is in the details and these details are sketchy, so far. The economy will only be stimulated by improving consumer sentiment and spending, by a rise in domestic aggregate demand echoed in a healthy increase in consumer inflation," PVM Oil Associates noted.
Oil has traded in a narrow range since late summer as demand growth falters amid China's economic woes, while rising supply from the United States, Canada and South America is expected to be sufficient to more than meet demand growth in 2025, even as OPEC+ looks to begin returning some supply cuts to market beginning in April.
Source : Bloomberg
