Oil prices rose on Friday, heading for a second consecutive weekly gain on optimism around China’s economic growth.
The price of the February contract was up 1.1% to $73.3 a barrel, while the price of the February contract was up 0.8% to $76.6 a barrel. Both contracts were on course for a second consecutive weekly gain, with the WTI 1.3% and 0.9% higher.
China’s December PMI data showed a slower pace of growth than expected, but an official survey suggested that policy stimulus is trickling into some sectors. Beijing has signaled looser monetary policy and has implemented a raft of stimulus measures to boost its sluggish economy.
The Chinese central bank has indicated that it plans to lower interest rates from 1.5% “at an appropriate time” in 2025. Traders are also assessing data on US crude oil inventories, with the Energy Information Administration (EIA) reporting a 1.2 million-barrel decline in crude oil inventories last week, short of analyst expectations. Despite this, the latest EIA surveys show that US oil production remains near record levels, and the incoming administration is likely to focus on increasing domestic fossil fuel production, which could lead to oversupply concerns. The International Energy Agency has forecast a rise in demand for 2025, but believes the oil market will remain adequately supplied.