RIYADH – Oil prices were little changed on Friday but were poised for a weekly gain amid optimism that economic stimulus efforts will spur a recovery in China. However, a stronger dollar capped gains, according to Reuters.
Brent crude futures dipped 2 cents to $73.24 a barrel by 08:35 a.m. Saudi time. US West Texas Intermediate (WTI) crude traded at $69.61, down 1 cent, from Thursday's close. Despite the slight intraday losses, Brent was up 0.4 percent on the week, while WTI rose 0.2 percent.
The World Bank on Thursday raised its forecast for China's economic growth in 2024 and 2025, while acknowledging that subdued household and business confidence, along with headwinds in the property sector, would continue to weigh on the economy next year.
China, the world's largest oil importer, revised upwards its 2023 gross domestic product estimate by 2.7 percent, although it noted that this revision would have a limited impact on growth this year.
Chinese authorities have approved the issuance of 3 trillion yuan ($411 billion) worth of special treasury bonds next year, according to sources cited by Reuters, as Beijing intensifies fiscal stimulus efforts to revitalize its struggling economy.
However, a stronger US dollar exerted downward pressure on oil prices. The greenback has appreciated by about 7 percent this quarter and remained near a two-year high against major currencies after the Federal Reserve signaled a slower pace of rate cuts in 2025. A stronger dollar makes oil more expensive for holders of other currencies.
The latest weekly report from the American Petroleum Institute (API) industry group indicated a decline in US crude oil inventories by 3.2 million barrels last week, market sources reported on Tuesday.
Traders will be closely watching the official inventory report from the US Energy Information Administration (EIA) to confirm the API data. The EIA data is scheduled for release at 9 p.m. Saudi time on Friday, later than usual due to the Christmas holiday.
Analysts in a Reuters poll anticipate a crude oil inventory decline of approximately 1.9 million barrels in the week ending December 20. Gasoline and distillate inventories are projected to fall by 1.1 million barrels and 0.3 million barrels, respectively.
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