Oil News: China’s Import Uptick Buoys Oil Demand but Recovery Unclear

Light crude oil futures face critical resistance at $69.11, with traders closely watching for selling pressure to re-emerge at this level. A break above $69.11 could set the stage for a rally toward the 50-day moving average at $70.05, a key technical level. Further bullish targets include $71.53 and the 200-day moving average at $72.95. On the downside, support levels stand at $66.98, $66.53, and $65.65, indicating potential risks for traders if bearish momentum accelerates.

China’s Stimulus and Oil Demand

China’s announcement of adopting an “appropriately loose” monetary policy for 2025 has provided a modicum of support for oil prices. This shift marks the first easing of China’s stance in over a decade, aimed at bolstering economic growth in the world’s largest crude importer.

Additionally, China’s crude oil imports rose year-over-year in November, the first increase in seven months. However, analysts noted this uptick was largely driven by stockpiling rather than a genuine improvement in domestic demand. Market sentiment remains cautious as the nation grapples with weak consumer inflation and tepid aggregate demand, underscoring the need for broader economic recovery.

Middle East Instability Adds Risk Premium

The ouster of Syrian President Bashar al-Assad has added a layer of geopolitical uncertainty to the oil market. While Syria is not a significant oil producer, its strategic ties with Russia and Iran raise concerns about broader regional instability. Market participants, however, appear to be pricing in limited risks of disruptions to oil supplies at this stage.

The situation in Syria follows 13 years of civil war, with rebels now forming a new government. The potential for escalated tensions in the region remains a wildcard, especially given its historical ties to major oil-exporting nations.

US Monetary Policy and Supply Factors

Oil traders are also looking ahead to the Federal Reserve’s meeting next week, where a 25-basis-point rate cut could boost demand in the world’s largest economy. However, inflation data due this week may impact the Fed’s decision, leaving traders on edge.