Oil prices continued the upward trend on Friday, fueled by optimism about increased economic activity in China and the US.
The international benchmark Brent crude rose by 0.06% to $75.82 per barrel at 11.12 a.m. local time (0812 GMT), up from $75.77 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) increased by 0.04% to $72.78 per barrel, compared to its prior session close of $72.75.
Possible changes in the economic growth of the US after US President-elect Donald Trump takes over from the White House on Jan. 20 are expected to impact oil prices by feeding demand in the world’s largest crude oil consuming country.
The expectation of oil and natural gas consumption in the US will increase following the policies implemented after Trump takes office easing market players’ demand concerns and drives prices upwards.
The US Federal Reserve (Fed) is expected to cut interest rates twice throughout the year, with the first rate cut expected towards the end of the first half of the year. These anticipated rate cuts are believed to boost economic activity in the USA and subsequently increase oil demand.
In addition, data indicating that US crude oil stocks decreased more than expected, supporting the perception that demand is strengthening here, affecting prices upwards.
The US Energy Information Administration (EIA) announced that commercial crude oil stocks in the country decreased by approximately 1.2 million barrels last week to 415.6 million barrels. The market expectation was that stocks would decrease by about 2.4 million barrels.
However, Chinese President Xi Jinping’s promise to overcome internal and external challenges in the economy as it enters 2025 strengthens the predictions that economic activity in the world’s top oil importing country will increase and positively affect oil demand.
China’s annual National People’s Congress is to convene in Beijing on March 5. On the margins of the congress, the country will finalize the national budget for 2025 and set the socioeconomic priorities for the year with the economic targets, including the gross domestic product.
