Oil Barrel Price Rises Driven by Increased Diesel Demand
Oil prices rose on Monday in a day of low trading activity, with markets awaiting economic data from China and the U.S. later this week to assess the growth outlook for the world’s two largest oil consumers.
Brent crude futures gained 29 cents, or 0.4%, to $74.46 per barrel. The most active contract for March delivery rose 49 cents, or 0.7%, to $74.29 per barrel. U.S. West Texas Intermediate, the USOIL, added 69 cents, or 1%, to $71.29 per barrel.
Diesel is Replacing Gas this Winter
Diesel prices led the energy complex, with concerns over colder weather in the coming weeks driving demand for diesel as a substitute for natural gas in heating.
U.S. natural gas futures surged 17%, reaching their highest level since January 2023, driven by weather forecasts and increased export demand.
Oil prices were also supported by optimism about China’s economic growth next year, which could boost demand from the world’s largest oil importer.
Chinese Growth Policy Incentives
To stimulate growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special Treasury bonds in 2025, according to Reuters last week.
China has also allocated at least 152.49 million metric tons of crude import quotas to independent refiners in a second batch for 2025 so far.
Meanwhile, the World Bank has raised its growth forecast for China in 2024 and 2025 but warned that weak consumer and business confidence, along with challenges in the real estate sector, will continue to weigh on the economy next year.

