Oil Prices Rise on US Inventory Drop and Chinese Stimulus Hopes
Oil futures closed higher on Friday, December 27, 2024. The market reacted to the release of weekly US oil inventory data. An unexpected drop in stockpiles boosted prices. Expectations of further economic stimulus in China also supported the upward trend.
This scenario ensured the commodity ended the week with gains. Earlier, the Federal Reserve’s last decision of the year had pressured prices. The Fed signaled a more restrictive policy for 2025, strengthening the dollar.
WTI crude for February delivery rose 1.41% on the New York Mercantile Exchange. It closed at $70.60 per barrel, up $0.98. Brent crude for the same month gained 1.24% on the Intercontinental Exchange.
It settled at $74.17 per barrel, an increase of $0.91. Weekly gains reached 1.22% for WTI and 1.37% for Brent. The US Energy Department reported a significant drop in oil inventories.
In addition, stocks fell by 4.237 million barrels to 416.779 million barrels for the week ending December 20. Analysts had expected a smaller decline of 1.1 million barrels.
Distillate stocks also decreased, while gasoline inventories increased contrary to expectations. Oil‘s gains reflect market optimism about a recovery in Chinese crude demand.
Balancing Oil Markets
Government support measures are expected to materialize throughout 2025. The latest move involves approving a 3 trillion yuan treasury bond offering next year. This follows monetary support packages and discussions on social system restructuring.
However, the potential reignition of trade wars between the US and China could drag oil demand and prices down. The geopolitical risk premium from Middle East tensions currently benefits prices.
This effect will likely dissipate over time. Market focus is expected to remain on China’s economic recovery and global oil demand growth. The oil market continues to balance supply and demand factors. OPEC+ production cuts aim to support prices.
However, rising non-OPEC output, especially from the US, adds downward pressure. Economic uncertainties in major consuming countries also influence the Market outlook. Traders closely monitor these factors for price direction in the coming months.
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Commodities — Live Market Board
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
| BRENT | 88.88 | -0.03% | +34.42% | 88.91 | 90.07 | 88.12 | 29,713 |
| WTI | 83.11 | -0.11% | +31.57% | 83.20 | 84.35 | 82.40 | 166,848 |
| COPPER | 6.61 | +0.03% | +46.70% | 6.61 | 6.71 | 6.61 | 39,543 |
| LITHIUM | 75.20 | +1.47% | +62.95% | 74.11 | 75.80 | 75.08 | 89,275 |
| IRON ORE | 161.91 | — | +58.10% | 161.91 | 161.91 | 1 | |
| SOY | 1,184 | +3.20% | +17.05% | 1,148 | 1,199 | 1,168 | 163,179 |
| CORN | 480.50 | +10.02% | +29.34% | 436.75 | 480.75 | 459.50 | 341,248 |
| WHEAT | 655.00 | +3.93% | +29.70% | 630.25 | 657.75 | 631.50 | 128,793 |
| COFFEE | 317.25 | -5.51% | +0.67% | 335.75 | 321.20 | 313.55 | 21,747 |
| SUGAR | 16.43 | -1.79% | -3.01% | 16.73 | 17.11 | 16.22 | 171,992 |
| COCOA | 5,719 | +3.18% | -34.96% | 5,543 | 5,779 | 5,574 | 26,773 |
| ORANGE JUICE | 138.55 | -0.47% | -45.38% | 139.20 | 141.05 | 137.50 | 703 |
| COTTON | 85.03 | +2.33% | +26.78% | 83.09 | 82.90 | 81.96 | 16,546 |
| BEEF | 223.60 | -3.93% | -5.18% | 232.75 | 226.40 | 223.00 | 16,126 |
| CATTLE | 339.10 | -3.16% | -1.82% | 350.17 | 345.50 | 338.60 | 10,164 |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
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