London — Oil rose 1% on Friday and was on track for a weekly gain, spurred by expectations of a stimulus-driven economic recovery in China, the world’s biggest oil importer, and by forecasts of lower U.S. inventories.
Analysts polled by Reuters had expected U.S. crude stocks to have declined by about 1.9 million barrels last week and market sources said the American Petroleum Institute put the decline at 3.2 million barrels.
Brent crude futures were up 74 cents, or 1%, at $74 a barrel by 1404 GMT. U.S. West Texas Intermediate crude rose 80 cents, or 1.15%, from Thursday’s close to $70.42. For the week Brent and WTI were up 1.5% and 1.4% repectively.
“Probably we are moving back up again in anticipation of a crude draw in the U.S.,” said UBS analyst Giovanni Staunovo. “Some support for oil might come soon from cold weather supporting demand.”
The U.S. Energy Information Administration’s official weekly inventory report is due at 1 p.m. EST (1800 GMT), later than normal because of the Christmas holiday.
Optimism over Chinese economic growth and oil demand was buoyed on Thursday by the World Bank raising the forecast for Chinese economic growth in 2024 and 2025, but it said that subdued household and business confidence would continue to weigh next year.
Chinese authorities have agreed to issue special treasury bonds worth 3 trillion yuan ($411 billion) next year, sources told Reuters this week, as Beijing acts to revive the sluggish economy.
However, a stronger U.S. dollar capped oil price gains. The U.S. currency has been boosted by expectations that the incoming Donald Trump administration’s policies will boost growth and lift inflation.
A stronger dollar makes oil more expensive for buyers holding other currencies.
Reporting by Alex Lawler, Enes Tunagur and Sudarshan Varadhan; editing by David Goodman – Reuters
