December 26, 2024
New Delhi, India
Crude oil prices
Crude oil prices surged higher on Tuesday, fueled by optimism over China’s proposed economic stimulus and stabilizing market conditions ahead of the Christmas holidays. At the time of writing, WTI crude traded at $69.95, while Brent crude stood at $72.85.
Key Drivers Behind the Price Surge:
- China’s Economic Stimulus:
- Chinese policymakers announced plans to inject a record 3 trillion Yuan ($411 billion) into the economy through special treasury bonds in 2025.
- The move aims to bolster consumption subsidies, business equipment upgrades, and investments in advanced technology and manufacturing sectors.
- As one of the world’s largest oil consumers, China’s increased spending is anticipated to drive a significant boost in global oil demand.
- US Dollar Stability:
- The US Dollar Index, which measures the performance of the greenback against a basket of currencies, traded just below a two-year high as volatility diminished ahead of Christmas.
- A weaker dollar typically supports oil prices, making crude more affordable for holders of other currencies.
- US Crude Stockpile Data Awaited:
- Markets are bracing for the release of the American Petroleum Institute’s (API) weekly crude stockpile data. Last week’s report showed a drawdown of 4.7 million barrels, signaling robust demand.
Additional Developments in the Oil Market:
- India’s Challenges with Russian Crude:
- Indian state refiners are reportedly struggling to procure adequate volumes of Russian crude, according to Bloomberg sources.
- Reduced Methane Emissions in the US:
- Methane emissions from the Permian Oil Basin in the US dropped 26% in 2023, as companies implemented advanced technologies to curb greenhouse gas leaks, per S&P Global Commodity Insights.
Outlook:
As traders look forward to the holidays, oil prices remain buoyed by the prospect of higher demand driven by China’s economic recovery measures and improving global market sentiment. Analysts will closely watch the API crude stockpile data for further direction in the energy markets.
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