Chinese Demand, Europe, Syria Development Buoy Oil Prices

By Adedapo Adesanya

Oil prices rose on Tuesday, influenced by increasing demand in China, the world’s largest buyer, as well as developments in Europe and Syria, with Brent crude futures closing at $72.19 per barrel after chalking up 5 cents or 0.07 per cent while the US West Texas Intermediate finished at $68.59 a barrel after it gained 22 cents or 0.32 per cent.

China will adopt an “appropriately loose” monetary policy in 2025 as the world’s largest oil importer tries to spur economic growth. This would be the first easing of its stance in 14 years.

Chinese crude imports also grew annually for the first time in seven months, jumping in November on a year-on-year basis.

Speculation about winter demand in Europe also contributed to the rise in prices as the period has been known for high demand.

In Syria, rebels were working to form a government and restore order after the ousting of President Bashar al-Assad, with the country’s banks and oil sector set to resume work on Tuesday.

Although Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran – two of the world’s largest oil producers.

Market analysts noted that the tensions in the Middle East seem contained, which led market participants to price for potentially low risks of a wider regional spillover leading to significant oil supply disruption.

The market is also looking forward to the US Federal Reserve, which is expected to make a 25 basis point cut to interest rates at the end of its December 17-18 meeting.

This move could improve oil demand in the world’s biggest economy, though traders are waiting to see if this week’s inflation data derails the cut.

Crude oil inventories in the US rose by 499,000 barrels for the week ending November 29, according to The American Petroleum Institute (API). Analysts had expected a draw of 1.30 million barrels.

For the week prior, the API reported a 1.232-million barrel build in crude inventories.

So far this year, crude oil inventories have fallen by roughly 3.4 million barrels since the beginning of the year, according to API data.

Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.

Also, the market is getting relief from the recent decision of selected members of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay the rollback of 2.2 million barrels per day of oil production cuts to April from January. Another 3.6 million barrels per day in output reductions across the OPEC+ group has been extended to the end of 2026 from the end of 2025.