Oil Prices Rise Amid China Stimulus and Trump's Presidency

Oil prices rose in Asian trade on Thursday, as attention shifted toward potential fiscal stimulus in China, the top importer of oil, while traders processed the implications of Donald Trump’s presidency.

Crude prices saw some recovery from previous losses following Trump's victory in the 2024 elections, which led to a dollar surge to a four-month high, putting pressure on oil markets. The dollar stabilized on Thursday.

Oil markets were also affected by reports showing a larger-than-expected increase in U.S. inventories.

Current Oil Prices

• Brent oil futures (January) rose 0.5% to $75.28 a barrel.
• West Texas Intermediate crude futures rose 0.4% to $71.54 a barrel (20:19 ET / 01:19 GMT).

China NPC Meeting Observed for Fiscal Cues

China's National People's Congress began a four-day meeting earlier this week, expected to propose more fiscal spending initiatives to stimulate economic growth amid ongoing slowdowns. The world's largest oil importer anticipates increased fiscal measures, having previously announced several aggressive stimulus strategies. Analysts from JPMorgan suggested that a Trump victory might lead to heightened fiscal stimulus from Beijing, anticipating his promises of imposing steep trade tariffs.

Market Reactions to Trump's Victory and U.S. Factors

Following Trump’s election win, oil prices initially fell due to fears of increased U.S. oil production, which could exacerbate global oversupply. However, losses were mitigated by speculations that Trump would adopt a tougher stance on Iran and Venezuela, possibly instituting further sanctions that could limit global oil supply.

Additionally, Trump is expected to implement more expansionary economic policies that may support future U.S. demand.

Besides U.S. political developments, negative sentiment was reinforced by the increased oil inventory data. Traders were also alert for any supply disruptions in the Gulf of Mexico due to Hurricane Rafael, which is projected to affect the area this week.

A Federal Reserve meeting is anticipated to close later on Thursday, with expectations of a 25 basis point rate cut.