Investing.com– Oil prices rose slightly in Asian markets on Monday as traders took positive advice from the US government to avoid a weekend shutdown, while soft inflation data from the country also helped.
The focus remained mainly on demand until 2025, with top oil exporter China signing plans for further stimulus measures next year. On the supply front, the prospect of more US sanctions against Iran and Russia also reflected a tight supply outlook.
February crude rose 0.4% to $73.20 a barrel, while it rose 0.4% to $69.75 a barrel at 20:19 ET (01:19 GMT).
Positive US signals support oil prices
Oil traders were relieved by the US government to avoid a possible shutdown over the weekend, as President Joe Biden agreed to stop oil spending and approve government funding until March.
Fears of a US shutdown rose last week after President-elect Donald Trump criticized the bipartisan funding bill for its provisions in the Democratic legislature and proposed a revised bill that seeks to raise the debt ceiling. The reform was rejected by lawmakers.
Markets fear that the US shutdown, especially during the holiday season, will disrupt travel and hurt fuel demand.
Oil markets were also supported by the softer , as the greenback was pushed back from one-year highs after the data – the Federal Reserve's preferred inflation gauge – read lower than expected in November, showing some cooling in price pressures.
But the reading came just days after the Fed signaled a slower pace of rate cuts through 2025 — a scenario that weighed on economic growth and stymie oil demand.
China's demand for solid goods sets the theme for 2025
Concerns about slowing demand and rising supplies have seen oil prices fall more than 5% so far in 2024.
Going into 2025, the focus will be on whether more stimulus measures in China can help spur economic growth.
There will also be a focus on US policy under President-elect Donald Trump, who has marked a more protectionist approach to China and Iran.
The US may impose further sanctions on Iran's oil industry, further reducing global supply.
Recent reports said the US is also considering further sanctions against Russian oil exports.