Oil Prices Slip in Thin Holiday Trade as Traders Await Economic Data
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Oil prices edged lower on Monday in light holiday trading, as traders awaited key economic data releases from China and the US this week, according to Reuters. The upcoming data is expected to shed light on the health of the world's two largest oil consumers and the outlook for global demand.
Brent crude futures dipped 6 cents to $74.11 a barrel by 0111 GMT, while the more active March contract fell 6 cents to $73.73 a barrel. US West Texas Intermediate crude also declined, dropping 8 cents to $70.52 a barrel.
Both contracts had enjoyed a strong week, rising roughly 1.4% last week. This was driven by a larger-than-anticipated drawdown in US crude inventories, as refiners boosted activity and holiday-related fuel demand increased.
Oil prices were further supported by optimism about Chinese economic growth next year, which could significantly boost demand from the world's top crude oil importer. Chinese authorities have pledged to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025 to stimulate the economy. Separately, the World Bank has raised its forecast for China's economic growth in 2024 and 2025, but warned that subdued consumer and business confidence, along with headwinds in the property sector, could weigh on the economy.
Investors are closely watching China's manufacturing Purchasing Managers' Index (PMI) surveys, due out on Tuesday, and the US Institute for Supply Management (ISM) survey for December, scheduled for Friday.
Meanwhile, hopes for a new agreement to transport Russian gas through Ukraine are fading. Russian President Vladimir Putin stated last Thursday that there was no time left this year to finalize a new deal. Analysts believe that the loss of piped Russian gas will lead to increased liquefied natural gas (LNG) imports for Europe.