Oil Prices Surge Amidst Holiday Lull
As global markets enter a period of reduced activity, oil futures have experienced a surprising upswing, driven by optimism surrounding China’s economic stimulus plans for 2025. This renewed confidence has injected life into the oil market, with experts attributing the boost to overnight news of China’s stimulus efforts.
Stimulus Hopes Fuel Demand Expectations
According to Scott Shelton of TP ICAP, the recent API report, which revealed a 3.2 million barrel decline in U.S. crude stocks for last week, reflects typical year-end trends of crude drawdowns. However, Shelton cautions that this trend may not persist, predicting crude stock builds in the first quarter of the year.
Market Anticipation Builds Ahead of EIA Report
As the Energy Information Administration (EIA) prepares to release its weekly inventories report on Friday, market participants are eagerly awaiting the latest data. In the meantime, oil prices continue to rise, with West Texas Intermediate (WTI) up 0.7% at $70.58 a barrel and Brent crude 0.6% higher at $74.03 a barrel.
A Glimmer of Hope for Oil Producers
The recent price surge offers a welcome respite for oil producers, who have been grappling with fluctuating demand and supply chain disruptions. As the global economy continues to navigate uncertain waters, the Chinese stimulus package may provide a much-needed boost to oil demand in the coming year.
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