A stronger dollar limited gains, but Friday saw little change in oil prices, which were expected to rise weekly amid hopes that economic stimulus measures could spur a resurgence in China. By 0535 GMT, Brent crude futures dropped 2 cents to $73.24 a barrel. At $69.61, U.S. West Texas Intermediate crude was down 1 cent from its closing price on Thursday. On a weekly basis, however, WTI increased by 0.2% and Brent by 0.4%.

The World Bank increased its 2024 and 2025 economic growth prediction for China on Thursday but cautioned that the country's economy would continue to struggle in 2025 due to weak business and family confidence and challenges in the real estate market.

The largest oil importer in the world, China, increased its forecast of its GDP for 2023. by 2.7%, but also said the change would have little impact on growth this year.

As Beijing increases fiscal stimulus to boost a struggling economy, Reuters reported this week that Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, citing sources.

But advances were constrained by a higher US currency, which also affected oil prices. After the Federal Reserve hinted at fewer rate cuts in 2025, the greenback has increased by around 7% this quarter and has held steady against key rivals at a nearly two-year high.
For holders of foreign currencies, oil costs more when the dollar is stronger.

According to market sources on Tuesday, the American Petroleum Institute industry group's most recent weekly assessment on U.S. inventories revealed that crude stocks dropped by 3.2 million barrels last week.

 

Investors will be watching to see if the U.S. Energy Information Administration's official inventory report validates the drop. Due to the Christmas holiday, the EIA data is due on Friday at 1 p.m. EST (1800 GMT), which is later than usual.

In the week leading up to December 20, analysts predict that crude stockpiles would drop by roughly 1.9 million barrels, while distillate and gasoline inventories will drop by 0.3 and 1.1 million barrels, respectively, according to a Reuters poll.