Brent inches down amid cautious trade
The front-month ICE Brent contract has lost $0.42/bbl on the day from Friday, to trade at $73.83/bbl at 09.00 GMT.
PHOTO: Crude oil pump jacks. Getty Images
Upward pressure:
Oil prices have been supported by optimism for Chinese economic growth in the coming year, which could increase demand from the world’s largest crude oil importer.
Chinese authorities plan to issue 3 trillion yuan ($411 billion) in special treasury bonds next year to stimulate the economy. The World Bank has also raised its growth forecasts for China in 2024 and 2025, Reuters reported. This could boost oil demand in the country and support Brent's price.
Additionally, data from the US Energy Information Administration (EIA) revealed a larger-than-expected drawdown in US crude inventories for the week ending 20 December. US crude stocks fell by 4.2 million bbls as refiners increased activity and the holiday season led to an increase in fuel demand, Reuters reported.
Prices were further supported by “bigger-than-expected weekly slumps in US crude and distillate fuel stocks reported by the Energy Information Administration for the week ended December 20,” according to Vandana Hari, founder and analyst at VANDA Insights.
Downward pressure:
Meanwhile, market participants remain cautious and are awaiting economic data from China and the US later this week to evaluate growth in the world’s two largest oil consuming nations.
The market is focused on China’s PMI factory surveys, set for release on Tuesday, and the US ISM survey for December, which will be published on Friday. This uncertainty has contributed to put some downward pressure on Brent futures.
By Tuhin Roy
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