Dec 10 2024: Oil prices eased on Tuesday, reflecting reduced concerns over the aftermath of Syrian President Bashar al-Assad’s ouster. However, China’s commitment to implementing stronger policy stimulus helped support the market, offering hopes of increased demand from the world’s largest crude importer.
Brent crude futures slipped 26 cents (0.4%) to $71.88 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 30 cents (0.4%) to $68.07 by 0707 GMT. This followed a more than 1% rise in both benchmarks on Monday.
Middle East Tensions Subside
Market strategist Yeap Jun Rong from IG noted that the Middle East tensions appear contained, reducing fears of a broader regional spillover that could disrupt oil supplies.
Syria’s rebels are now working to establish a government and restore the country’s oil and banking sectors following Assad’s ousting. While Syria is not a major oil producer, its strategic location and ties to Russia and Iran keep it relevant to regional stability.
Focus on Fed Rate Decision and China’s Economic Policies
The oil market’s attention is shifting to next week’s anticipated U.S. Federal Reserve rate cut, which could boost demand in the world’s largest economy. The Fed is expected to reduce rates by 25 basis points, although upcoming inflation data may influence this outlook.
Positive sentiment surrounding China’s economic prospects is also tempering oil price declines. Beijing’s move to adopt an “appropriately loose” monetary policy in 2025—its first policy shift in 14 years—aims to stimulate growth and could potentially enhance China’s crude demand.
China’s Crude Imports Rise
In a promising development, China’s crude oil imports saw annual growth in November for the first time in seven months, supported by lower prices for Middle Eastern supplies and stockpiling demand.
While hopes for aggressive stimulus remain, analysts suggest oil price gains may be limited until more clarity emerges on the impact of Beijing’s measures on crude demand.
