Investing.com– Oil prices settled higher Friday after data showed weekly inventories fell more than expected.

At 2:30 p.m. ET (19:30 GMT), rose 1.2% to $74.17 a barrel, and settled higher at $70.60 a barrel.

Trading volumes were thin ahead of the new year’s start as many institutional investors and traders typically take time off during the holiday season. Additionally, year-end profit-taking and portfolio rebalancing reduce trading activity. 

US crude inventories fall more than expected

The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, reported Friday crude stockpiles for week ended Dec. 20 fell 4.2M barrels, compared with expectations for a decline of just 700,000 barrels.

This drawdown indicates a tightening supply in the U.S. crude oil market, which has implications for global oil prices. Following the API’s report, oil prices had edged higher, supported by hopes for additional fiscal stimulus in China and the reported decline in U.S. crude inventories.

Gasoline inventories rose by 1.6 million barrels last week, while distillate inventories—which include diesel and heating oil—fell by about 1.7 million barrels.

China stimulus hopes persist

Chinese authorities have decided to issue a record-breaking 3 trillion yuan ($411 billion) in special treasury bonds next year, in an intensified fiscal effort to stimulate a struggling economy, Reuters reported on Tuesday.

Moreover, China is allowing local officials to broaden investments with key government bonds and simplifying approvals to better utilize public funding for economic growth, a government document showed on Wednesday.

On Thursday, the World Bank revised its economic growth forecast for China upward for 2024 and 2025 but cautioned that weak household and business confidence, combined with challenges in the property sector, would continue to hinder growth in the coming year.

The outlook for oil demand hinges on the hope that China, the world’s largest oil importer, can revive its economy, especially as there are concerns about a potential oversupply due to expected increases in production from non-OPEC countries.

Ayushman Ojha contributed to this report. 

Investing.com– Gold prices fell Friday, ending the week lower as Treasury yields rose following the U.S. Federal Reserve’s hawkish tilt 

was 0.7 at $2,614.40 per ounce, while expiring in February edged 0.9% lower to $2,630.36 an ounce.

Trading in gold typically sees thin volumes and subdued prices toward the year-end as many institutional traders and market participants close their books ahead of the holiday season.

Additionally, at year-end, economic data releases and major policy decisions are typically fewer, reducing catalysts for significant price volatility.

The yellow metal was set to edge up 0.3% for the week after losing more than 1% in the previous one. A strong dollar after the Fed’s hawkish shift last week has continued to put downward pressure on bullion.

Gold slips amid pressure from rising yields

The was slightly lower on Friday, pairing overnight gains, though continued to hover near a two-year high it touched last week. Still, Treasury yields were sharply higher, pressuring the yellow metal.  

A weaker dollar often boosts on gold prices as it makes the yellow metal more attractive to buyers using other currencies.

Gold prices had fallen sharply after the Fed policy meeting indicated only two more rate cuts in 2025, against previous expectations of four.

Higher interest rates put downward pressure on gold making it more attractive compared to interest-bearing assets like bonds

Other precious metals were lower on Friday. were down 3.6% to $919.90 an ounce, while were down 1.5% $29.935 an ounce.

Copper gains on concentrate shortage news, strong dollar caps gains

Among industrial metals, copper prices were higher after a Reuters report showed China’s leading copper smelters have set lower processing charge guidance for the first quarter of 2025 compared to this quarter, reflecting an ongoing shortage of copper concentrates.

At a meeting in Shanghai, representatives from the China Smelters Purchase Team agreed on new rates for copper concentrate treatment and refining charges, setting them at $25 per metric ton and 2.5 cents per pound, down 28.6% from the fourth-quarter guidance of $35 per ton and 3.5 cents per pound.

The red metal failed to fully capitalize on this news, as a strong dollar weighed.

Benchmark  on the London Metal Exchange rose 0.4% to $8,995.00 a ton, while February  edged down 0.1% to $4.1242 a pound.

Ayushman Ojha contributed to this report. 

By Shariq Khan

NEW YORK (Reuters) -Oil prices settled more than 1% higher on Friday and recorded a weekly gain in low trading volume ahead of year-end, buoyed by a larger-than-expected drawdown from inventories last week.

futures rose 91 cents, or 1.2%, to settle at $74.17 per barrel. U.S. West Texas Intermediate crude futures rose 98 cents, or 1.4%, to $70.60 per barrel.

On a weekly basis, both Brent and WTI crude gained about 1.4%.

U.S. crude oil inventories fell by 4.2 million barrels in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand, data from the U.S. Energy Information Administration showed on Friday. [EIA/S]

Analysts polled by Reuters had expected a 1.9 million-barrel drawdown, whereas figures from the American Petroleum Institute released earlier in the week estimated a 3.2 million-barrel draw, according to market sources. [API/S]

Optimism over Chinese economic growth has also sparked hopes of higher demand next year from the top oil importing nation.

The World Bank on Thursday raised its forecast for Chinese economic growth in 2024 and 2025. Meanwhile, Chinese authorities have agreed to issue special treasury bonds worth 3 trillion yuan ($411 billion) next year, sources told Reuters this week, as Beijing acts to revive the sluggish economy.

The war between Russia and Ukraine, which had become an afterthought in energy markets due to stagnant global oil demand, seems to be returning to the forefront after numerous events this week that could impact supplies next year, fuel distributor TACenergy’s trading desk wrote on Friday.

NATO said on Friday it would boost its presence in the Baltic Sea, a day after Finland seized a ship carrying Russian oil on suspicion of causing internet and power cable outages. Meanwhile, Dutch and British wholesale prices rose amid fading hopes for a new deal to transit Russian gas through Ukraine.

Tensions have flared in the Middle East too, after Israel raided a north Gaza hospital on Friday and struck targets linked to the Houthi movement in Yemen on Thursday, but these events are unlikely to affect oil prices much heading into next year, StoneX analyst Alex Hodes said.

Instead, the largest risk in the Middle East is from sanctions enforcement that will likely occur with the incoming Donald Trump administration in the U.S., he said.