West Texas Intermediate (WTI) Oil prices have been on an upward trajectory, edging closer to $69.00 per barrel. The price appreciation has been spurred by a series of developments, with China’s policy announcements taking center stage.
China’s Politburo signaled a significant shift in its economic approach, stating plans to implement a “moderately loose” monetary policy and a “more proactive” fiscal stimulus next year. This departure from the past decade’s cautious stance has raised hopes of a boost in energy demand from the world’s largest crude importer. Complementing this, China’s crude oil imports in November witnessed a year-on-year increase of over 14%, snapping a seven-month decline.
On the supply front, the latest American Petroleum Institute (API) weekly report brought a surprise. US crude oil stockpiles rose by 0.499 million barrels for the week ending December 6, contrary to market expectations of a 1.30 million-barrel decrease. The previous week had seen a 1.232 million-barrel increase.
Geopolitical tensions in the Middle East have also added to the mix. The recent upheaval, with Syrian President Bashar al-Assad and his family seeking asylum in Moscow after the end of his regime, has the potential to disrupt oil supplies and thus support WTI prices.
In addition to these factors, traders are keeping a close eye on key US economic data. The US CPI inflation figures are anticipated to show a year-on-year rise to 2.7% in November from 2.6% in October, while the core CPI, excluding food and energy, is expected to remain at a 3.3% increase year-on-year. Market expectations, as per the CME FedWatch Tool, suggest a nearly 85.8% probability of a 25-basis point rate cut by the Federal Reserve.
With all these elements in play, traders are eagerly awaiting the release of the OPEC Monthly Oil Market Report. This report is crucial as it delves into key issues affecting the global oil market and provides a forecast for crude oil market trends in the coming year, which could have a significant impact on WTI’s future price path.
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