Oil Set for Gain on U.S., China Policy Support
Oil prices were little changed on Friday and set for a weekly gain after closing at their highest in more than two months in the previous session, supported by expectations of further economic stimulus in China and lower U.S. interest rates.
Brent crude futures were down 7 cents at $75.86 a barrel by 0900 GMT after settling at their highest since Oct. 25 on Thursday. U.S. West Texas Intermediate crude was down 6 cents at $73.07, with Thursday’s settlement the highest since Oct. 14.
Brent was on track for a weekly gain of 2.2% while WTI was set for a 3.5% gain.
Signs of China’s economic fragility have raised expectations for policy steps to boost growth in the world’s biggest oil importer.
"With China's economic trajectory set to play a key role in 2025, hopes are pinned on government stimulus measures to boost consumption and support oil demand growth in the coming months," said StoneX analyst Alex Hodes.
China raised wages for government workers in a surprise move that will inject up to $20 billion into the economy.
Investors are also watching for further interest rate cuts by the Federal Reserve this year to support the U.S. economy
Lower interest rates can boost economic growth and oil demand, with lower borrowing costs also helping to boost consumption.
In the U.S., the world's largest oil consumer, crude inventories fell less than expected last week, down 1.2 million barrels to 415.6 million barrels. Analysts had expected a 2.8 million-barrel draw.
U.S. gasoline and distillate inventories jumped last week as refineries ramped up production, even as demand for the fuel hit a two-year low.
Traders are also tracking the latest weather forecast and the possibility of a cold snap in the U.S. and Europe that could boost demand for diesel for heating in the coming weeks.
Source: Investing.com
