Oil News: Steady as Traders Await China and U.S. PMI Data

Crude Oil Holds Steady in Light Holiday Trading

Light crude oil futures are nearly flat as the holiday-shortened trading week begins, with markets closed on Wednesday for New Year’s Day. Traders anticipate low volume and limited price movement early in the week, with focus shifting to economic data from the U.S. and China later in the week.

At 11:41 GMT, Light Crude Oil futures are trading $70.55, down $0.05 or -0.07%.

Technical Analysis Indicates Rangebound Market

Currently, light crude is trading within a retracement zone between $68.69 and $71.10. Key support is near the 50-day moving average at $69.14, while resistance aligns with the 200-day moving average at $72.40. The market holds a slight upward bias, as prices remain above the 50-day average but below the 50% retracement level at $71.10. A breakout above $71.10 could lead to a test of $72.40, while a break below $68.69 could signal further downside risk.

Thin Holiday Trade Keeps Prices Stable

Oil prices remain broadly unchanged on Monday, with thin trading expected as the year winds down. Last week, oil benchmarks gained approximately 1.4%, driven by a larger-than-expected drawdown in U.S. crude inventories. Refinery activity increased, and seasonal demand for fuel provided additional support.

China’s Growth Outlook and Stimulus Measures

Market sentiment is buoyed by optimism regarding Chinese economic growth in 2025. Reports indicate Chinese authorities will issue 3 trillion yuan ($411 billion) in special treasury bonds next year to stimulate the economy. Additionally, independent refiners in China have received 152.49 million metric tons of crude oil import quotas for 2025, suggesting expectations for rising demand.

Global oil consumption hit record levels in 2024, even as China’s economic performance underwhelmed. Analysts anticipate improved growth in China moving forward, driven by stimulus measures. Lower interest rates in the U.S. and other regions are also expected to support oil demand in 2025.

Outlook for Crude Oil Prices

Short-term price action will likely remain muted, with traders eyeing China’s PMI factory data due Tuesday and the U.S. ISM survey on Friday. Crude prices are expected to remain rangebound this week, but bullish momentum could develop if economic data confirms stronger growth prospects. A sustained move above $71.10 could trigger a rally, while a drop below $68.69 would turn the outlook bearish, signaling potential for deeper losses.

More Information in our Economic Calendar.