WASHINGTON (dpa-AFX) - Oil prices moved higher on Tuesday on expectations the Chinese government will announce additional stimulus revive growth in the world's second largest economy.
There is optimism over solid U.S. fuel demand after separate set of data released the previous day showed new home sales rebounded and core capital goods orders increased in November.
West Texas Intermediate crude oil futures for February closed higher by $0.86 or about 1.25% at $70.10 a barrel.
Brent crude futures settled higher by $0.95 or about 1.3% at $73.58 a barrel.
China's Finance Ministry announced today that the government will increase public spending with a greater focus on promoting domestic demand growth next year.
Analysts say that China, the world's biggest oil importer, plans to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year to revive a faltering economy.
Possibility of supply disruptions due to persisting geopolitical tensions, and the passage of a stop-gap spending bill by the U.S. Senate to avert a government shutdown also supported oil prices.
Kazakhstan's decision to shelve its plans to raise oil production by 190,000 bpd next year contributed as well to oil's upside.
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