On Tuesday (December 10), international oil prices rose mainly due to market expectations of increased demand from China, the world's largest crude oil importer, and changes in the situation in Syria after President Assad was ousted. Brent crude oil futures rose 0.07% to settle at $72.19 per barrel, while U.S. crude oil rose 0.32% to $68.59 per barrel. The market generally believes that China's economic stimulus policies will drive the country's crude oil demand to rebound, thereby supporting global oil prices.
China's crude oil imports recorded a year-on-year increase in November, marking the first rise in seven months. Data indicate that China's crude oil import volume significantly surged in November compared to the same period last year, bringing optimistic expectations to the oil market. As China increases its economic stimulus efforts, it is expected that the country's energy demand will rise further, providing strong support for oil prices.
Meanwhile, the risk of tight supply during Europe's winter is also providing support for oil prices. Although the global oil market continues to face oversupply issues, Europe could face significant supply shortages this winter, especially under cold weather conditions, where energy demand may rise sharply, putting upward pressure on oil prices.
In addition, changes in the Syrian situation are also a factor in the rise in oil prices. Syrian President Bashar al-Assad has been overthrown in the ongoing civil war, and rebels are striving to rebuild the government and restore order. Syrian banks and the oil sector resumed operations on Tuesday, which may imply the gradual recovery of the country's oil production and exports. The market continues to monitor the situation in Syria, as the uncertainty, despite its limited direct impact on the global crude oil market, still provides some support for oil prices.
The direction of Federal Reserve's monetary policy also affects oil prices. The market generally expects the Federal Reserve to further cut interest rates by 25 basis points at its December 17-18 meeting, which might stimulate U.S. economic growth, thus increasing global oil demand. However, the market is still waiting for this week’s U.S. inflation data to determine if the Federal Reserve will postpone rate cuts due to inflationary pressures. If the inflation data does not meet expectations, it may restrict the Federal Reserve's rate-cutting process, affecting the further rise of oil prices.
In summary, the rise in oil prices is supported by multiple factors. The recovery in Chinese demand, the risk of supply in Europe, and changes in the Syrian situation all provide support for the oil market, while the Federal Reserve's monetary policy remains a key factor influencing the trend of oil prices. Investors will continue to focus on the upcoming U.S. inflation data to predict the future direction of oil prices.
