Investing.com-- Oil prices fell Thursday, giving up early-day gains that followed growing hopes for fresh stimulus from China that could lift the demand outlook on crude.
At 1:58 p.m. ET (18:58 GMT), Brent Oil Futures traded 0.5% higher to $73.97 a barrel, and Crude Oil WTI Futures also gained 0.5% to $70.01 a barrel.
Volumes were expected to be thin for the remainder of the holiday-shortened week.
Oil had risen more than 1% on Tuesday, and extended gains on Thursday after reports emerged around fresh stimulus measures from China.
Fresh China's stimulus hopes improve sentiment
Chinese authorities have decided to issue a record-breaking 3 trillion yuan ($411 billion) in special treasury bonds next year, in an intensified fiscal effort to stimulate a struggling economy, Reuters reported on Tuesday, citing unnamed sources.
Moreover, China is allowing local officials to broaden investments with key government bonds and simplifying approvals, permitting projects unless restricted by a cabinet-published list, to better utilize public funding for economic growth, a government document showed on Wednesday.
Hopes that China, the largest oil importer, can revive its economy remains key for the oil demand outlook at time when are concerned about an oversupply next as non-OPEC are expected to ramp up output.
Satoru Yoshida, a commodity analyst at Rakuten Securities, noted that oil prices are also being supported by anticipation of higher fossil fuel production and demand once U.S. President-elect Donald Trump assumes office next month.
US crude inventories shrink- API
US oil inventories fell by 3.2 million barrels during the week ended Dec. 20, media reports showed on Wednesday, citing the American Petroleum Institute (API) data.
Gasoline inventories rose by 3.9 million barrels last week, while distillate inventories—which include diesel and heating oil—fell by about 2.5 million barrels.
The figures come ahead of data from the Energy Information Administration, the statistical arm of the US Department of Energy, due on Friday.
A Reuters poll on Tuesday projected that crude oil inventories likely declined by approximately 1.9 million barrels in the week ending December 20, with gasoline stocks expected to drop by 1.1 million barrels and distillate inventories by 0.3 million barrels.
The report comes ahead of the official petroleum report from Energy Information Administration due Friday, with economists forecasting a 700,000 barrel decline for the week ended Dec. 20.
Ayushman Ojha contributed to this report.