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12/12/24
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WTI Crude Oil Rises Amid Sanctions on Russia and Optimism for China’s Stimulus
West Texas Intermediate (WTI) crude oil prices rose to approximately $69.95 during the early European trading session on Thursday. This increase is attributed to potential tightening of US sanctions on Russian oil exports and anticipated stimulus measures from China, which together are creating a more bullish outlook for the market.
Recent developments indicate that the Biden administration is contemplating stricter sanctions aimed at Russia’s oil trade. This decision comes amid ongoing geopolitical tensions, notably due to Russia’s actions in Ukraine. The European Union is also introducing new sanctions as a part of its response to the conflict. These moves could further restrict global crude supply, contributing to a rise in WTI prices.
Moreover, expectations surrounding China’s economic policy are fueling optimism among traders. The Chinese government recently communicated plans for a more lenient monetary policy in the upcoming years, aiming to rejuvenate its economy for the first time in over a decade. This initiative has raised hopes that an economic boost in China would lead to increased oil demand, positively influencing global prices.
Additionally, a decline in US crude oil inventories could provide further support for WTI prices. The latest report from the US Energy Information Administration indicated a reduction in stockpiles by 1.425 million barrels for the week ending December 6, a smaller drop compared to the previous week’s 5.073 million barrels. The market had forecast a decrease of about 1.1 million barrels, suggesting stronger-than-expected consumption.
However, OPEC’s recent adjustments to its demand growth forecasts signal ongoing challenges in the oil market. The organization has revised its projections for 2024 and 2025 downward for the fifth consecutive month. These changes reflect a growing awareness of the complexities facing global oil supply and demand dynamics as the market heads towards 2025.
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