Oil Prices Surge on Cold Snap and China Boost

6 Jan 2025 , 09:11 AM

Monday saw oil prices linger at their highest level since October as investors watched how Beijing’s economic stimulus plans and colder Northern Hemisphere weather might affect the world’s fuel demand.

Brent crude futures had risen 15 cents, or 0.2%, to $76.66 a barrel after closing Friday at its highest level since October 14. U.S. West Texas Intermediate crude closed Friday at its highest level since October 11 and gained 22 cents, or 0.3%, to $74.18 a barrel.

Beijing announced on Friday that it will significantly expand funding from ultra-long dated treasury notes in 2025 to encourage company expansion and consumer-boosting activities as part of its efforts to bolster the flagging economy.

Additionally, its central bank announced on Friday that it will lower interest rates and the reserve requirement ratio of banks at the appropriate moment.

China, the world’s top oil importer and number two consumer, faced challenges with crude imports and gasoline demand last year due to slowing economic development and a shift to cleaner fuels in its transportation sector.

Due to anticipated policy changes and stricter sanctions from the administration of incoming U.S. President Donald Trump, Goldman Sachs predicts that Iran’s output and exports would decline by the second quarter.

According to them, by the second quarter, the OPEC producer’s output would decrease by 300,000 barrels per day to 3.25 million barrels per day.

In accordance with a weekly report released on Friday by energy services company Baker Hughes, the number of oil rigs in the United States, which is a predictor of future production, dropped by one to 482.

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