The oil price has clearly risen this week. New stimulus measures for the Chinese economy in particular pushed the price up. A favourable inflation figure from the United States also supported the market.
On Thursday, December 26, oil was still trading at $73,26 per barrel. A week later, on Thursday, January 2, the oil price had risen to $75,93. In the meantime, the oil price has been slightly corrected downwards to $75,70 per barrel. This has brought the oil price to its highest level since mid-October.
Oil prices were buoyed as the new year began after it emerged that China was working on a new strategy to achieve 2025% economic growth by 5. The country plans to issue significantly more long-term government bonds this year, Reuters reported, with the money to be used to boost domestic consumption.
For example, the plan includes setting up a trade-in program for cars and electrical appliances to promote domestic consumption of these goods. Within such a program, consumers can trade in old products to buy new products at a discount. In addition, the plan is to introduce new subsidies for digital products. Within the new program, Chinese citizens can purchase phones, tablets and smartwatches partly at the expense of the state. The market expects that the impact of the measures will increase global oil demand.
US inventories fall
The oil price is also rising in the American economic situation. A favourable inflation figure in particular gave the oil price support. Inflation in the United States came to 2,8% in November, which is lower than expected. This creates optimism regarding the American economy. Initially, there was slight hope that the interest rate would be lowered sooner than expected. However, this expectation was contradicted early on, causing the price to correct slightly on Friday 3 January.
However, the market is still wary of oversupply. Production is increasing significantly, particularly in the United States. In October, oil production in that country increased by 260.000 barrels per day to 13,46 million barrels per day, according to recent data from the US Energy Agency (EIA). The 2,3% increase broke the previous record of 13,36 million barrels per day. This caused the oil price to drop by 16%. Although demand also increased significantly, the new data creates the sentiment that overproduction is still lurking.
Diesel price increases relatively limited
Meanwhile, the price of diesel is also taking a step up. On Friday, December 27, 100 liters of diesel was traded for €130,17. Up to and including Thursday, December 31, the price rose to a level of €131,96. On Friday, January 3, the price of diesel had fallen slightly again to €131,77 per 100 liters.