Light crude oil futures are trading at almost stable levels as the holiday’s shortened trading week begins, as markets close on Wednesday for New Year’s. Traders expect lower volume and limited price action early in the week, with focus shifting to economic data from the U.S. and China later in the week.
Light crude oil futures are trading at $70.55, down $0.05 or -0.07%. Currently, light crude is trading within a correction zone between $68.69 and $71.10. The main support is near the 50-day moving average at $69.14, while resistance is in line with the 200-day moving average at $72.40. The market maintains a slight bullish bias, with prices remaining above the 50-day moving average but below the 50% retracement level at $71.10. A breakout above $71.10 could trigger a test of $72.40, in while a breakout below $68.69 could signal more downside risk.
Lean trading during holidays keeps prices stable
Oil prices remained broadly unchanged on Monday, with lean trading expected as the year draws to a close. Last week, oil indices rose around 1.4%, driven by a larger-than-expected drop in U.S. crude inventories. Refinery activity increased, and seasonal fuel demand provided additional support.
China’s Growth Prospects and Stimulus Measures
Market sentiment was boosted by optimism about China’s economic growth in 2025. Reports suggest Chinese authorities will issue 3 trillion yuan ($411 billion) in private Treasuries next year to stimulate the economy.
Global oil consumption reached record levels in 2024, even as China’s economic performance weakened. Analysts expect China’s growth to improve in the future, driven by stimulus measures. Low interest rates in the United States and other regions are also expected to support oil demand in 2025.
Enhancing Arab cooperation in energy and stimulating economic growth
Oil prices also supported optimism about China’s economic growth next year, which could lift demand from the top crude importer. To revive growth, Chinese authorities have approved the issuance of a record 3 trillion yuan ($411 billion) of private treasury bonds in 2025, Reuters reported last week.
Ryan Fitz, chief commodities strategist at Marix, said: “Global oil consumption reached an all-time high in 2024 despite China’s underperformance and oil inventories heading into next year at relatively low levels.”
China’s economic data is expected to improve in the future as recent stimulus measures take hold in 2025. Lower interest rates in the U.S. and elsewhere would also support oil consumption.”
Separately, the World Bank raised its forecast for China’s economic growth in 2024 and 2025, but warned that weak household and business confidence, coupled with headwinds in the real estate sector, will remain a drag on next year.
This transformation provides an opportunity to enhance the efficiency of Arab cooperation in the field of energy, and keep pace with the evolving global energy landscape, which now includes diverse energy sources and renewable energy.
Establishment of OAPEC
OAPEC founded in 1968 to separate petroleum policy debates from the political conflicts that often dominated the Arab League at the time. Arab petroleum exporters formed the membership, which enabled the establishment of joint Arab institutions, such as the Arab Petroleum Investment Company (APICORP), based in Dammam, Saudi Arabia.
For decades, OAPEC has played a key role in shaping Arab petroleum policies and made influential decisions, such as the 1973 oil embargo. However, calls have grown over the years to transform the organization into a more inclusive entity that includes various energy sectors, thus strengthening Arab cooperation in this vital field.
Oil prices rise as decisive economic shifts wait
Oil prices continued to rise in world markets until the thirtieth of December, the Azerbaijan state agency reported.
During trading on the London Intercontinental Exchange, the price of Brent crude futures for February 2025 rose by 0.18%, or $0.13, to reach $74.30 a barrel.
Meanwhile, the February 2025 price of West Texas Intermediate crude oil on the NYMEX Commodity Exchange in New York rose 0.07%, or $0.05, to $70.65 a barrel.
Oil prices rose on Monday in year-end trading, as traders wait more Chinese and U.S. economic data later this week to assess growth in the world’s two largest oil consumers.
Brent crude futures rose 20 cents to $74.37 a barrel. The March contract was the most active at $74.00 a barrel, up 21 cents. U.S. West Texas Intermediate crude futures rose 27 cents to $70.87 a barrel. Investors await China’s factory PMI surveys due on Tuesday and the U.S. Institute for Supply Management survey for December due on Friday.
Brent and WTI rose 1.4% last week, supported by a larger-than-expected drop in U.S. crude inventories in the week ended Dec. 20 as refiners ramp up their activities and boost the holiday season for fuel demand.
Research firm IIR Energy said on Monday that available capacity at U.S. oil refineries was expected to fall by about 108,000 barrels per day in the week ended Jan. 3.
Crude Oil Price Outlook
Near-term price action is likely to remain muted, with traders keeping an eye on Chinese factory PMI data due on Tuesday and the US Institute of Supply Management survey on Friday. Crude oil prices should remain in a limited range this week, but bullish momentum could develop if economic data confirms stronger growth prospects.
