Crude oil prices are experiencing a remarkable upswing, with West Texas Intermediate (WTI) rising for the sixth consecutive day, trading close to $73.00 per barrel during the Asian trading session on Friday. On Thursday, WTI peaked at $73.39, marking its highest level in over two months. This positive trend is largely attributed to growing optimism that governments around the world will enhance policy support aimed at revitalizing economic growth, which, in turn, is likely to stimulate fuel demand.
Despite this bullish sentiment, factory activity across Asia, Europe, and the United States concluded the year on a subdued note. Concerns over escalating trade tensions and a fragile economic outlook amid the transition to a new U.S. administration have dampened expectations for a robust start to 2025. China’s National Development and Reform Commission (NDRC) remains optimistic, however, asserting its commitment to achieving sustained economic recovery in 2025. Plans have been outlined to significantly boost funding through ultra-long treasury bonds, aimed at supporting new initiatives and promoting consistent consumption growth throughout the year.
The People’s Bank of China is also anticipated to implement an interest rate cut within the year, a strategy being closely monitored by traders as they gauge its potential impact on oil demand. In his New Year address, President Xi Jinping underscored the importance of economic growth, promising to adopt more proactive measures to strengthen China’s economy in 2025, which is significant given the nation’s position as the world’s largest oil importer.
Furthermore, the Energy Information Administration has reported a reduction in crude oil inventories, noting a decline of 1.178 million barrels for the week ending December 27. This marks the sixth consecutive week of inventory drops, and while the decrease was less than market forecasts, it reflects ongoing tightening in the oil supply. Additionally, stock levels at the Cushing, Oklahoma delivery hub also fell, indicating shifting dynamics in the crude market landscape.
