Oil prices hit more than 2-month high on demand expectations, dollar strengthening By Investing.com
Investing.com- Oil prices rose to their highest level in more than two months in Asian trade on Monday as traders anticipated an improvement in demand in top importer China, although a stronger dollar capped any major gains.
Crude oil prices have risen for two consecutive weeks on hopes of improving demand in China, especially as Beijing prepares to unlock additional stimulus measures in the coming months.
Cooler weather in the US and Europe is also expected to help boost oil demand, particularly for distillates.
But dollar strength capped any big gains in crude oil, as the greenback hit its highest levels in more than two years ahead of a series of key economic readings this week.
U.S. crude for March delivery was up 0.2% at $76.63 a barrel, while it was up 0.2% at $73.36 a barrel by 8:11 p.m. ET (01:11 GMT).
Cold weather, China boosts demand hopes
Cold weather across the US and Europe is expected to fuel increased demand for , potentially reducing supplies in both regions.
Snow, ice and sub-freezing temperatures are expected in parts of the US as a powerful winter storm rages across the country.
The storm is being driven by the polar vortex, which is also expected to drop temperatures across Europe.
In China, traders are seeking additional stimulus measures from Beijing, amid persistent signs of economic weakness in the country. An arrival later this week is expected to provide more clues about the world’s biggest oil importer.
Strong dollar with key data, rate cut in focus
Oil prices were pressured by gains in the , which last week rose to more than a two-year high on growing confidence that the Federal Reserve will cut interest rates at a slower pace in 2025.
Two Fed officials doubled down on the central bank’s recent warning that the run against inflation is not over, prompting increased caution that rates will remain relatively high for much longer.
Their comments saw the focus shift directly to a series of key economic readings due this week, most notably the December data, due on Friday.
Protectionist policies under incoming President Donald Trump are also expected to support the dollar. A stronger dollar is putting pressure on oil demand, making crude oil more expensive for international buyers.
