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Oil Prices Fluctuate Amid Middle East Tensions and Demand Concerns

Oil prices have risen as China's announcement of a looser monetary policy boosts demand expectations, despite concerns over U.S. oil stock increases.

Oil prices have seen an uptick as market participants anticipate increased demand from China, the world's largest crude importer, following Beijing's announcement of a looser monetary policy aimed at stimulating economic growth. This policy shift marks the first easing of China's monetary stance in 14 years, set to take effect in 2025. Brent crude futures rose by 36 cents, or 0.5%, to $72.55 a barrel, while U.S. West Texas Intermediate crude futures increased by 36 cents, or 0.5%, to $68.95. The policy change has rekindled hopes for stronger stimulus measures, although market participants remain cautious, seeking more concrete details beyond the initial positive messaging. Chinese crude imports have shown annual growth for the first time in seven months, rising by over 14% in November compared to the previous year. However, analysts caution that while China's policy changes may prevent further downsides, they may not fully counteract potential impacts from U.S. trade measures under President-elect Donald Trump. In the U.S., crude oil and fuel stocks have risen, with crude stocks increasing by 499,000 barrels and gasoline inventories by 2.85 million barrels. Official data from the U.S. Energy Information Administration is expected to provide further insights. Meanwhile, oil prices also received support from potential tight supply in Europe during the winter and geopolitical developments in the Middle East, including the overthrow of Syrian President Bashar al-Assad. Despite these factors, the market remains focused on the potential impact of China's economic policies and the upcoming U.S. Federal Reserve meeting, which could influence oil demand through interest rate decisions.

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