Oil rises from two-month high on hopes of more policy support for growth By Reuters

Written by Florence Tan

SINGAPORE (Reuters) – Oil prices extended their gains on Friday after closing at their highest in more than two months in the previous session on hopes that governments around the world could increase policy support. to restore economic growth that would raise the demand for fuel.

Futures rose 16 cents, or 0.2%, to $76.09 a barrel by 0132 GMT after sitting higher since Oct. 25 on Thursday. US West Texas Intermediate crude was at $73.32 a barrel, up 19 cents, or 0.3%, Thursday’s closest since Oct. 14.

Both contracts are on track for a second weekly increase as investors return from the holidays, improving trading value.

Factory activity in Asia, Europe and the US ended 2024 on a soft note as prospects for the new year worsened amid growing trade risks from the second presidency of Donald Trump and the economic recovery of China.

“December PMIs for Asia were a mixed bag, but we still expect manufacturing activity and GDP growth in the region to remain subdued going forward,” Capital Economics analysts said in a note. , refer to the information on buying managers’ indexes published in the. Thursday.

“With growth set to struggle and inflation below target in many countries, we think central banks in Asia will continue to ease policy.”

Low interest rates should spur greater economic growth that could lead to higher fuel consumption.

Investors are eyeing further interest rate cuts by the US Federal Reserve this year to support its economy, while Chinese President Xi Jinping has promised aggressive policies to boost growth.

“With China’s economic conditions set to play a key role in 2025, hopes are placed on the government’s stimulus measures to drive increased consumption and boost oil demand growth in the coming months,” StoneX analyst Alex Hodes said.

In the United States, the output of the world’s largest oil consumer, gasoline and distillates rose last week as improvements increased but fuel demand fell for two years. (EIA/S)

Neutral stockpiles fell less than expected, down 1.2 million barrels to 415.6 million barrels last week compared with analysts’ expectations for a draw of 1 million barrels 2.8.

Traders are also paying attention to the latest weather forecast as the prospect of cold weather in the United States and Europe in the coming weeks could increase the demand for diesel as a heating medium.