Oil prices edged lower on Monday in thin holiday trading ahead of the year-end as traders awaited key economic data from China and the U.S. later in the week to gauge growth prospects in the world’s two largest oil-consuming nations.
By 0111 GMT, Brent crude futures slipped 6 cents to $74.11 a barrel, while the more actively traded March contract eased 6 cents to $73.73 a barrel. Meanwhile, U.S. West Texas Intermediate crude fell 8 cents to $70.52 a barrel.
Both benchmarks gained approximately 1.4% last week, supported by a larger-than-expected drawdown in U.S. crude inventories for the week ending December 20. The decline was attributed to increased refinery activity and heightened fuel demand during the holiday season. [EIA/S]
Oil prices also found support from optimism over China’s economic growth outlook for next year, which could boost demand from the world’s top crude importer. Chinese authorities have reportedly agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025 to stimulate growth, according to a Reuters report last week.
Additionally, the World Bank revised its forecasts for China’s economic growth in 2024 and 2025 upward. However, it cautioned that challenges such as weak household and business confidence and ongoing issues in the property sector could temper growth next year.
Investors are closely watching China’s PMI factory surveys, scheduled for release on Tuesday, and the U.S. ISM survey for December, due on Friday, for further insights.
In Europe, hopes for a new agreement to transit Russian gas through Ukraine are diminishing after Russian President Vladimir Putin stated on Thursday that there was insufficient time to finalize a deal this year. Analysts suggest that the potential loss of piped Russian gas could drive Europe to import more liquefied natural gas (LNG).
