Written by Yuka Obayashi
TOKYO (Reuters) – Oil prices rose on Thursday in thin holiday trade, driven by hopes for additional fiscal stimulus in China, the world's largest oil importer, while an expected decline in inventories also provided support.
Futures rose 11 cents, or 0.2 percent, to $73.69 a barrel by 0148 GMT. The price of US West Texas Intermediate crude reached $70.25 a barrel, up 15 cents, or 0.2%, from the pre-Christmas settlement on Tuesday.
China plans to strengthen fiscal support for consumption next year by increasing support for pensions and medical insurance for the population and expanding trade in consumer goods, according to a Finance Ministry announcement on Tuesday.
Meanwhile, Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, Reuters reported on Tuesday, citing two sources, as Beijing steps up fiscal stimulus to revive the faltering economy.
“Hopes for Chinese stimulus measures are supporting the market,” said Satoru Yoshida, commodities analyst at Rakuten Securities.
He added, “Expectations of an expansion in fossil fuel production and demand after Donald Trump takes office as President of the United States next month also support oil prices.”
An expected decline in US crude oil and fuel inventories was also supporting the market.
An expanded poll conducted by Reuters on Tuesday showed that crude inventories are expected to decline by about 1.9 million barrels in the week ending December 20. Gasoline and distillate inventories are expected to decline by 1.1 million barrels and 0.3 million barrels, respectively.
Market sources, citing American Petroleum Institute figures, said on Tuesday that crude oil and distillate inventories in the United States decreased last week.
The latest data from the Energy Information Administration, the statistical arm of the US Department of Energy, is scheduled to be released at 1 p.m. EDT (1800 GMT) on Friday.
On the supply side, the Libyan National Oil Corporation said on Wednesday that the country’s average crude production in 2024 exceeded its target of about 1.4 million barrels per day.
($1 = 7.2975 RMB)
