Oil Rises on Hopes That China's 'Looser' Monetary Policy Will Boost Demand

Oil prices rose as market participants anticipated an increase in demand from the world's largest crude oil importer, following China's announcement of a looser monetary policy to stimulate economic growth. Brent crude futures gained 37 cents or 0.51%, rising to $72.56 per barrel, while U.S. West Texas Intermediate crude futures climbed 39 cents or 0.57% to $68.98.

IG's market strategist Yeap Jun Rong stated, "Stronger policy signals from Chinese officials have rekindled hopes for stronger stimulus measures by 2025, allowing oil prices to find a bottom recently. However, considering that market participants are still looking for more concrete details beyond typical positive messaging, price gains remain somewhat limited."

China's crude oil imports saw their first annual increase in November in seven months, recording an increase of over 14% compared to the previous year. However, Mukesh Sahdev, head of oil markets at Rystad Energy, noted that China's policy changes might not be able to counter the effects of certain trade measures proposed by elected President Donald Trump, saying, "These policy changes from China, at best, may help prevent further negativity."