Investing.com — Oil prices rose to their highest level in more than two months in Asian trading Monday, as traders looked to improving demand in China, the largest importer, although a stronger dollar held back any significant gains.
Crude oil prices recorded gains for two consecutive weeks on hopes of improving demand in China, especially as Beijing prepares to launch more stimulus measures in the coming months.
Cold weather in the United States and Europe is also expected to help boost demand for oil, especially for distillates.
But the strength of the dollar limited any significant gains for crude, as the US currency reached its highest levels in more than two years ahead of a series of major economic readings this week.
Futures contracts expiring in March rose 0.2% to $76.63 per barrel, while they rose 0.2% to $73.36 per barrel by 20:11 ET (01:11 GMT).
Cold weather and Chinese stimulus stimulate demand hopes
Cold weather across the United States and Europe is expected to stimulate increased demand for , which could lead to tighter supplies in both regions.
Snow, ice and sub-zero temperatures are expected to fall across large swaths of the United States as a powerful winter storm sweeps through the country.
The storm is being driven by a polar vortex, and is also expected to drop temperatures across Europe.
In China, traders are bracing for further stimulus measures from Beijing, amid continuing signs of economic weakness in the country. Oil due later this week is also expected to provide further signals about the world's largest oil importer.
Dollar is strong with key data and focus on interest rate cuts
Oil prices have been pressured by strength in the United States, which rose to their highest level in more than two years last week amid growing conviction that the Federal Reserve will cut interest rates at a slower pace in 2025.
Two Fed officials stressed the central bank's recent warning that the ride against inflation is far from over, leading to increased caution that interest rates will remain relatively high for longer.
Their comments saw the focus shift squarely to a series of key economic readings due this week, most notably December data, due on Friday.
Protectionist policies under incoming President Donald Trump are also expected to support the dollar. The higher dollar pressures demand for oil by making crude more expensive for international buyers.
