Oil Prices Remain Muted Amid Multiple Influences

Oil prices largely steadied on Thursday as traders assessed several factors, including new U.S. oil sanctions, China's fresh stimulus measures, and a grim oil demand outlook from OPEC.

Prices remained stable after a sharp rise earlier in the week due to expected tighter global supplies, with the U.S. preparing more sanctions against Russia. Also, gains were supported after China indicated more economic support.

At 09:04 PM ET (0204 GMT), Brent Oil Futures slightly dipped to $73.50 a barrel, while Crude Oil WTI Futures fell 0.1% to $69.79 a barrel. Both contracts, expiring in February, had risen over 2% on Wednesday despite OPEC cutting its oil demand growth forecasts for 2024 and 2025.

U.S. Treasury Secretary Janet Yellen noted that a weaker global oil market may allow further action against Russia's energy sector in an effort to limit its military engagements in Ukraine.

China Stimulus and Middle East Tensions Support Prices

Oil prices benefitted from hopes of new stimulus measures from China, the world’s largest oil importer, as the country commenced its Central Economic Work Conference (CEWC).

The Chinese government committed to easing monetary policies and introducing targeted stimulus to enhance economic growth. Additionally, rising tensions in the Middle East, sparked by Syria's rebel forces taking control of Damascus, added a risk premium to oil prices.

Market Reactions to U.S. CPI and Crude Inventories

Wednesday's U.S. consumer price index, which met expectations, strengthened predictions the Federal Reserve may cut interest rates next week, potentially boosting economic activity and oil demand.

Recent government inventory data indicated that U.S. oil inventories unexpectedly grew, alongside a rise in production. Increases in gasoline and distillate inventories for the second week in a row suggest resilience in U.S. oil supplies.

Markets are now looking towards the upcoming report from the International Energy Agency (IEA) for further insights on the demand outlook, noting that the IEA generally maintains a more conservative perspective than OPEC.