Oil Prices Hold Firm as Winter Demand and China’s Stimulus Drive Gains

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Oil prices hovered near their highest levels since October on Monday as investors assessed the potential impact of colder weather in the Northern Hemisphere and Beijing’s economic stimulus efforts on global fuel demand. 

Brent crude futures rose by 15 cents (0.2%) to $76.66 a barrel as of 0125 GMT, after reaching its highest level since October 14 in Friday's session. Similarly, U.S. West Texas Intermediate (WTI) crude gained 22 cents (0.3%) to $74.18 a barrel, following its October 11 high on Friday.  

China, the world’s largest oil importer and second-largest consumer, announced significant fiscal stimulus measures on Friday to revitalize its slowing economy.

Plans include a substantial increase in ultra-long-dated treasury bond funding in 2025 to boost business investments and consumer spending. Additionally, the central bank signaled forthcoming cuts to banks' reserve requirement ratios and interest rates.  

In 2024, China’s transition to cleaner fuels and slower economic growth had dampened crude imports and fuel consumption. However, these new measures aim to reverse the trend.  

On the supply front, Goldman Sachs anticipates a decline in Iran’s oil production and exports by the second quarter of 2025 due to expected policy shifts and tighter sanctions under the administration of incoming U.S. President Donald Trump. Iran’s output could drop by 300,000 barrels per day to 3.25 million barrels per day, the bank projected.  

Meanwhile, U.S. oil rig activity, a key indicator of future production, fell by one rig to 482 last week, according to energy services firm Baker Hughes.

Paraphrasing text from "Reuters" all rights reserved by the original author.