Oil Ticks Higher With China Stimulus and US Stockpiles in Focus

(Bloomberg) -- Oil rose as stimulus measures in China may help to bolster demand, and a US industry report flagged another drop in stockpiles.

Brent climbed toward $74 a barrel after a 1.3% gain on Tuesday, with West Texas Intermediate above $70. In a bid to bolster growth, China is giving local officials more leeway in how they invest proceeds of government bonds, while keeping interest rates steady for now. Policymakers pledged a “moderately loose” monetary stance in the top crude importer earlier this month.

In the US, the American Petroleum Institute said commercial crude inventories fell 3.2 million barrels last week, which would be the fifth consecutive drop if confirmed by official data. Nationwide stockpiles typically ebb in December, before building in the opening months of the new year.

“The obvious caveats apply with reading too much into price action at this time of year, but those that are still putting orders through the market are net buyers,” helped by signs of a larger-than-expected US stockpile draw, said Chris Weston, head of research for Pepperstone Group. There’s also talk of positioning for possible policy moves in China early next year, he said.

Crude is headed for a modest annual drop, although prices have been confined to a narrow range since mid-October. Heading into 2025, traders are looking at the possible implications of Donald Trump’s upcoming presidency, Beijing’s efforts to support its economy, and prospects for global crude supplies, with OPEC+ planning to loosen curbs only gradually after a series of delays.

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