Oil prices edged higher on Thursday in thin holiday trading, driven by hopes for additional fiscal stimulus in China, the world's biggest oil importer, while an anticipated decline in U.S. crude inventories also provided support.
Brent crude futures rose 11 cents, or 0.2%, to $73.69 a barrel by 0148 GMT. U.S. West Texas Intermediate crude was at $70.25 a barrel, up 15 cents, or 0.2%, from Tuesday's pre-Christmas settlement.
China plans to boost fiscal support for consumption next year by increasing pensions and medical insurance subsidies for residents and expanding trade-ins for consumer goods, according to a finance ministry announcement on Tuesday.
Meanwhile, Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, Reuters reported on Tuesday, citing two sources, as Beijing ramps up fiscal stimulus to revive a faltering economy.
"Hopes for China's stimulus measures are supporting the market," said Satoru Yoshida, a commodity analyst at Rakuten Securities.
"Expectations that fossil fuel production and demand will expand after Donald Trump takes office as U.S. President next month are also bolstering oil prices," he added.
An anticipated decline in U.S. crude and fuel inventories was also supporting the market.
An extended Reuters poll showed on Tuesday that crude inventories are expected to have fallen by about 1.9 million barrels in the week to Dec. 20. Gasoline and distillate inventories are seen falling by 1.1 million barrels and 0.3 million barrels, respectively.
U.S. crude oil and distillate stocks fell last week, market sources said, citing American Petroleum Institute figures on Tuesday.
The latest data from the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due at 1 p.m. EST (1800 GMT) on Friday.
On the supply side, Libya's National Oil Corp (NOC) said on Wednesday that the country's average crude production in 2024 exceeded its target of around 1.4 million barrels per day.
