Crude oil prices are on the rise, with traders gearing up for the Christmas holidays. The market is abuzz with news of China’s potential stimulus measures, which are expected to boost demand from one of the world’s top consumers. Oil prices are up nearly 1% as traders anticipate further stimulus in China.
Market dynamics and the US dollar
The US dollar index, which measures the performance of the US dollar against a basket of currencies, is just below its two – year high. As trading volume decreases ahead of the Christmas holiday, the dollar’s volatility is winding down. This position could potentially lead to a new two – year high before the end of the year.
China’s plans to sell a record 3 trillion yuan worth of special treasury bonds in 2025 are driving the market. The government aims to support consumption subsidies, business equipment upgrades, and investments in key technology and advanced manufacturing sectors. This is expected to increase demand for oil.
In other news, India’s state oil refiners are facing difficulties in purchasing the required volume of Russian crude. Additionally, methane emissions in the US Permian oil basin have decreased by 26% due to tightened operations and new technology.
The American Petroleum Institute (API) is set to release its weekly crude stockpile change number at 21:30 GMT. The previous week saw a drawdown of 4.7 million barrels. Traders are closely watching this data as it could impact the market.
Technical analysis
Crude oil prices are not seeing a significant jump despite the news of China’s stimulus. The 100 – day Simple moving average at $70.76 and $71.46 (February 5 low) act as strong resistance levels. If more tailwinds emerge, the next key level will be $75.27 (January 12 high). However, as the year-end approaches, quick profit – taking could occur.
On the downside, $67.12, which held the price in May and June 2023 and during the last quarter of 2024, is the first solid support nearby. If this level breaks, the 2024 year – to – date low at $64.75, followed by $64.38 from 2023, could come into play.
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