Oil Prices Soar on Growth Optimism

3 Jan 2025 , 09:58 AM

After closing at their highest level in almost two months the previous session, oil prices continued to rise on Friday on expectations that governments around the globe will boost policy assistance to boost economic development, which would raise demand for fuel.

Brent crude futures settled Thursday at its highest level since Oct. 25 and then increased 16 cents, or 0.2%, to $76.09 a barrel. The closing price of U.S. West Texas Intermediate crude on Thursday was $73.32 a barrel, up 19 cents, or 0.3%, the highest since October 14.

With investors returning from vacations, both contracts are poised for their second weekly gain, which will improve trade liquidity.

Amid mounting trade uncertainties from a second Donald Trump presidency and China’s faltering economic recovery, factory activity in Asia, Europe, and the United States finished 2024 on a bad note.

More economic growth should result from lower interest rates, which would raise gasoline consumption.

While China President Xi Jinping has promised more aggressive steps to spur growth, investors are anticipating additional interest rate cuts from the U.S. Federal Reserve this year to assist its economy.

As refineries increased production, gasoline and distillate stockpiles in the United States, the world’s largest oil consumer, surged last week, but fuel demand fell to a two-year low.

In contrast to experts’ estimates of a 2.8-million-barrel reduction, crude stocks dropped 1.2 million barrels to 415.6 million barrels last week.

For feedback and suggestions, write to us at [e-mail]