By Alex Lawler
LONDON (Reuters) -Oil rose slightly on Friday and was on track for a weekly gain, fueled by expectations of a stimulus-driven economic recovery in China, the world’s biggest oil importer, and forecasts of lower U.S. inventories.
Analysts polled by Reuters had expected U.S. crude inventories to fall by about 1.9 million barrels last week, and market sources said the American Petroleum Institute estimated the decline at 3.2 million barrels.
Brent crude futures (BZ=F) rose 4 cents to $73.30 a barrel by 0912 GMT. U.S. West Texas Intermediate crude (CL=F) traded at $69.81, up 19 cents from Thursday’s close. Brent rose 0.5% this week and WTI rose 0.4%.
“We are likely to move higher again in anticipation of a decline in US crude,” said UBS analyst Giovanni Staunovo. “There could be some support for oil soon due to cold weather supporting demand.”
The official weekly inventory report from the U.S. Energy Information Administration is due at 1:00 PM EST (6:00 PM GMT), later than normal due to the Christmas holidays.
Optimism about Chinese economic growth and oil demand was boosted on Thursday as the World Bank raised its forecast for Chinese economic growth in 2024 and 2025, but said subdued household and business confidence would continue to weigh next year.
Chinese authorities have agreed to issue special government bonds worth 3 trillion yuan ($411 billion) next year, sources told Reuters this week, as Beijing moves to revive its sluggish economy.
However, a stronger US dollar put an end to oil price increases. The US currency has been boosted by expectations that the incoming Donald Trump administration’s policies will boost growth and increase inflation.
A stronger dollar makes oil more expensive for buyers who hold other currencies.
(Reporting by Alex Lawler and Sudarshan Varadhan, Editing by David Goodman)
