Oil prices were little changed on Friday but were set for a weekly rise amid optimism that economic stimulus efforts will prompt a recovery in China, but a stronger dollar capped gains.
Brent crude futures fell 2 cents to $73.24 a barrel by 0535 GMT. U.S. West Texas Intermediate crude was at $69.61, down 1 cent, from Thursday’s close. However, on a weekly basis, Brent was up 0.4% and WTI rose 0.2%.
The World Bank on Thursday raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would keep weighing it down next year.
China, the world’s biggest oil importer, revised upwards its 2023 gross domestic product estimate by 2.7%, but also said the change would have little impact on growth this year.
Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, Reuters reported this week citing sources, as Beijing ramps up fiscal stimulus to revive a faltering economy.
However, a stronger U.S. dollar weighed on oil prices and capped gains. The greenback has risen about 7% this quarter and remained pinned at a near two-year peak against major peers after the Federal Reserve signalled slower rate cuts in 2025.
A stronger dollar makes oil more expensive for holders of other currencies.
The latest weekly report on U.S. inventories from the American Petroleum Institute industry group showed crude stocks fell last week by 3.2 million barrels, market sources said on Tuesday.
Traders will be waiting to see if the official inventory report from the U.S. Energy Information Administration confirms the decline. The EIA data is due at 1 p.m. EST (1800 GMT) on Friday, later than normal because of the Christmas holiday.
Analysts in a Reuters poll expect crude inventories fell by about 1.9 million barrels in the week to Dec. 20, while gasoline and distillate inventories are seen falling by 1.1 million barrels and 0.3 million barrels respectively.
(Reporting by Sudarshan Varadhan; Editing by Christian Schmollinger and Jamie Freed)