Decode foreign exchange platform: crude oil rebounds slightly, continue to pay attention to demand expectations and geopolitical changes

On Thursday (December 26), U.S. crude oil rose slightly in the Asian session, trading around $70.28/barrel. On the fundamentals, oil prices rebounded slightly to above $70 before Christmas.Decode Forex PlatformAnalysis: The main reason is that the market's demand for Asian countries is expected to pick up.

However, oil prices have always been running around this daily level 55-day moving average, and no clear direction has been given. At the same time, this week's EIA inventory has been postponed to Friday, maintaining range fluctuations in the short term. We continue to pay attention to the changes in market expectations for the Federal Reserve's interest rate cut in 2025, and whether the inventory data supports oil prices to break through upwards.

The expected decline in U.S. crude oil and fuel inventories also supported the market

U.S. crude inventories are expected to fall by about 1.90 million barrels in the week ending Dec. 20, while gasoline and distillate inventories are expected to fall by 1.10 million and 300,000 barrels, respectively, the survey showed.

Market sources on Tuesday quoted data from the American Petroleum Institute (API) as saying that U.S. crude and distillate inventories declined last week and gasoline inventories rose.

On the supply side, Libya's National Oil Company (NOC) said Wednesday that the country's 2024 crude oil production exceeded its target of about 1.40 million barrels per day.

Global demand is expected to pick up gradually, supporting oil prices

The finance ministries of major Asian countries held a national fiscal work conference and pointed out that in 2025, they should implement more active fiscal policies, increase the fiscal deficit ratio, increase the intensity and speed up the expenditure progress, and arrange "larger-scale" government bonds to provide more support for stabilizing growth and adjusting the structure.

Meanwhile, authorities in big Asian countries have agreed to issue special government bonds worth 3 trillion yuan next year, the largest ever, to ramp up fiscal stimulus to boost their economies, Reuters reported on Tuesday, citing two sources.

Satoru Yoshida, commodities analyst at Rakuten Securities, said: "Hopes of stimulus measures from Asian powers support the market."

Hamas and Israel have accused each other of delaying the ceasefire

Hamas, the Palestinian militant group, and Israel blamed each other on Wednesday for failing to reach a cease-fire, despite both sides reporting progress in the past few days. Hamas said Israel had offered more conditions, while Israeli Prime Minister Benjamin Netanyahu accused Hamas of reneging on understandings reached.

"The occupying power's new conditions related to troop withdrawal, ceasefire, prisoners, and the return of displaced people have delayed a possible agreement." Hamas added that it had shown resilience and was serious about negotiations mediated by Qatar and Egypt.

Netanyahu countered in a statement: "Hamas continues to lie, renege on the understandings reached, and continue to make negotiations difficult. However, he added that Israel will continue to work tirelessly to secure the release of the hostages."

From a technical standpoint, the US crude oil daily level is still in a range of oscillations, while the MACD indicator is expected to rebound upwards. The daily level should pay attention to whether the box pressure near $72 breaks through, thus driving the bulls upwards.

U.S. crude oil daily chart

At 10:48 Beijing time, US crude oil is now trading at $70.27 per barrel.