·         Oil prices are rallying higher near 1%, with traders set to head into the Christmas holidays.

·         Markets are catching up on some headlines about further stimulus in China, one of the top global consumers.

·         The US Dollar Index trades just below its current two-year high as volatility winds down

On Tuesday, crude oil prices were trading higher as traders anticipated the publication of the American Petroleum Institute (API) rather than Christmas Eve. Oil prices are surging in the US trading session, despite the fact that headlines regarding additional stimulus in China are also contributing to this trend. A 3 trillion Yuan bond injection is being proposed by Chinese policymakers as a means of stimulating the economy. This initiative is expected to increase expenditure and lead to an increase in demand for oil from one of the world's largest consumers.

The performance of the US Dollar (USD) against a basket of currencies is measured by the US Dollar Index (DXY), which is currently situated just below the two-year high. The final trading hours before Christmas are characterised by a decrease in volatility for the Greenback. A new two-year high could still be achieved before the end of the year, given its current position.
Crude Oil (WTI) is currently trading at $69.95, while Brent Crude is trading at $72.85.

Oil news and market fluctuations: China's demand is expected to increase.
In 2025, Beijing's policymakers intend to offer a staggering 3 trillion Yuan ($411 billion) in special treasury bonds. According to Reuters, the government intends to provide assistance with consumption subsidies, business equipment upgrades, and investments in advanced manufacturing and critical technology sectors.

People with knowledge of the situation have informed Bloomberg that the state oil refineries in India are experiencing difficulty in procuring the necessary quantity of Russian crude.
According to a study conducted by S&P Global Commodity Insights, methane emissions in the US Permian Oil basin decreased by 26% last year as a result of the implementation of new technology and the tightening of operations to prevent the leakage of the potent greenhouse gas.
The American Petroleum Institute (API) will disclose its weekly Crude Stockpile Change figure at 21:30 GMT. A drawdown of 4.7 million barrels occurred the previous week.

Technical Analysis of Oil: Aim for a close above $70

Refined Despite reports that China is planning to increase its domestic demand with a substantial 3 trillion Yuan (CNH) injection, oil prices have not experienced a substantial increase. This should be advantageous for the local oil demand, as China is one of the world's largest consumers. The probability of a significant increase in oil prices is exceedingly low due to the fact that the stimulus plan requires additional clarification and that numerous market participants are not trading on Tuesday.

The 100-day Simple Moving Average (SMA) at $70.76 and the $71.46 low from February 5 serve as reliable resistance levels in the vicinity. The next critical level will be $75.27, which was the high on January 12, should additional tailwinds emerge in support for Oil. Nevertheless, it is important to be cautious of the potential for rapid profit-taking as the year concludes.
The first solid support in the vicinity is $67.12, which was the price in May and June 2023 and during the final quarter of 2024. On the downside, this level remains unchanged. If that occurs, the 2024 year-to-date low of $64.75 will be revealed, followed by the 2023 low of $64.38.

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