Oil prices climbed by more than 1% on Monday as top importer China flagged its first move toward a loosened monetary policy since 2010 aiming to bolster economic growth, state media reported citing a Politburo meeting.
Brent crude futures were up 84 cents, or 1.18%, to $71.96 per barrel by 1136 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 91 cents, or 1.35%, to $68.11.
“The easing of monetary policy stance in China is likely the driver of the oil price rebounding, supporting risk sentiment,” UBS analyst Giovanni Staunovo said.
China’s growth has stalled as a collapse in the property market has hit confidence and consumption.
China’s slowdown was a factor behind oil producers group OPEC+ last week deciding to postpone its plans for higher output until April.
China will adopt a “moderately loose” monetary policy, according to an official readout from a meeting of top Communist Party officials, a term it last used in 2010 when it looked to support a recovery from the global financial crisis.
“The announcement, however, is short on details,” noted Tamas Varga of oil broker PVM, adding credible price support in the form of revived Chinese oil demand would come only once consumer sentiment and spending improves.
Oil prices fall on supply glut fears
Also supporting crude prices was uncertainty after the fall of Syrian President Bashar al-Assad.
Syrian rebels announced on state television on Sunday they had ousted Assad, ending a 50-year family dynasty in a lightning offensive that raised fears of a new wave of instability in a region already gripped by war.
“The development in Syria has added a new layer of politicaluncertainty in the Middle East, providing some support to the market,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting.
“But Saudi Arabia’s price reductions and OPEC+’s production cut extension last week underscored weak demand from China, indicating the market may soften toward year-end,” he said, noting investors are watching for early signs of any impact on the markets from U.S. President-elect Donald Trump’s expected energy and Middle East policies.
Separately, top exporter Saudi Aramco on Sunday reduced its January 2025 prices for Asian buyers to their lowest level since early 2021.
Investors are also bracing for a data-packed week, including a key U.S. inflation report on Wednesday that will provide more clues regarding the Federal Reserve’s plans for interest rates.
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