Oil Prices Steady in Thin Trading

Oil prices remained largely unchanged in Asian trade on Friday due to a holiday-shortened week, resulting in thin trading volumes as traders exercise caution around year-end assessments.

At 20:37 ET (01:37 GMT), Brent Oil Futures held steady at $73.22 per barrel, while Crude Oil WTI Futures showed minimal change at $69.19 per barrel.

Trading volumes were reduced ahead of the new year as many institutional investors typically take time off during the holiday season. Additionally, year-end profit-taking and portfolio rebalancing contributed to lower trading activity.

EIA Data Awaited After API Indicates Fall in US Crude Inventories

The U.S. Energy Information Administration (EIA) is set to release its weekly report later on Friday, providing insights into the supply and demand dynamics of the U.S. crude oil market, which influence pricing and economic decisions.

Earlier this week, reports indicated that U.S. oil inventories declined by 3.2 million barrels for the week ending December 20, according to the American Petroleum Institute (API). This drawdown suggests a tightening supply in the U.S. market, affecting global oil prices. Following the API's report, oil prices edged higher, buoyed by expectations of additional fiscal stimulus in China and the decline in U.S. crude inventories.

Gasoline inventories increased by 3.9 million barrels last week, while distillate inventories—which include diesel and heating oil—decreased by about 2.5 million barrels.

China Stimulus Hopes Persist

Chinese authorities plan to issue a record 3 trillion yuan ($411 billion) in special treasury bonds next year as part of an intensified fiscal effort to stimulate a struggling economy, as reported by Reuters on Tuesday.

China is also allowing local officials to invest more broadly with key government bonds and is simplifying approval processes for better utilization of public funding aimed at economic growth, as a recent government document indicated.

On Thursday, the World Bank revised its economic growth forecast for China upward for 2024 and 2025 but warned that weak household and business confidence, along with challenges in the property sector, would continue to impede growth in the upcoming year.

The outlook for oil demand heavily depends on hopes that China, the world’s largest oil importer, can revive its economy, especially amid concerns about potential oversupply due to increases in production from non-OPEC countries.