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Oil up on China's monetary policy shift

Published 2024-12-10, 08:40 p/m
© Reuters. FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. REUTERS/Angus Mordant/File Photo
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By Jeslyn Lerh

SINGAPORE (Reuters) -Oil prices rose on Wednesday, with market participants expecting demand to rise in China, the world's largest crude importer, after Beijing announced it would relax monetary policy to try to stimulate economic growth.

Brent crude futures gained 24 cents, or 0.3%, to $72.43 a barrel by 0730 GMT, while U.S. West Texas Intermediate crude futures rose 24 cents, or 0.4%, to $68.83.

China said on Monday it would adopt an "appropriately loose" monetary policy in 2025 as Beijing tries to spur its economy with the first easing of its stance in 14 years.

"Oil prices managed to find a footing lately, as stronger policy signals from Chinese authorities have once again rekindled hopes for stronger stimulus measures to come in 2025," said Yeap Jun Rong, market strategist at IG.

"But price gains are still somewhat constrained, given that market participants still want to see more concrete details beyond the typical positive messaging," Yeap said.

Chinese crude imports grew annually for the first time in seven months in November, up more than 14% from a year earlier.

China's policy changes, however, may not be able to counter any impact from the trade measures proposed by President-elect Donald Trump, said Mukesh Sahdev, head of oil analysis at Rystad Energy.

"This (China's policy changes) can only help prevent further downsides at best," he said.

In the U.S., crude oil and fuel stocks rose last week, market sources said on Tuesday, citing American Petroleum Institute figures on Tuesday. [API/S]

© Reuters. FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. REUTERS/Angus Mordant/File Photo

Crude stocks rose by 499,000 barrels in the week ended on Dec. 6, the sources said on condition of anonymity. Gasoline inventories rose by 2.85 million barrels, and distillate stocks rose by 2.45 million barrels, they said.

Official data on oil stocks from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. ET (1530 GMT). Analysts polled by Reuters expect a 900,000-barrel decline in crude and a 1.7 million-barrel increase in gasoline.

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