Oil rises on stimulus signals from China

Oil rose as investors weighed on the demand outlook after China took measures to boost its struggling property market. U.S. crude traded above $73 a barrel after closing the previous session down 1.2% at a one-week high. In China, authorities have increased pressure on banks to ease terms for property companies by encouraging talks to extend outstanding loans. Leading state-run financial newspapers on Tuesday carried reports that signaled the possibility of more supportive policies. China’s sluggish economic recovery, along with monetary tightening by central banks and resilient crude flows from producers including Russia and Iran, have provided headwinds for oil this year. That has prompted OPEC+ heavyweights Saudi Arabia and Russia to tighten supply to support prices. Investors will be watching the consumer price index on Wednesday for clues on the direction of interest rates, and the monthly reports from OPEC and the International Energy Agency on Thursday for a snapshot of the oil market. Ahead of those releases, the U.S. is set to deliver its Short-Term Energy Outlook. “The Saudi outages and the prospect of further support for China’s property sector appear to be providing a more solid footing for the market. Tomorrow’s U.S. CPI release will be key to near-term price direction, shaping market expectations for Fed policy in the coming months,” said Warren Patterson, head of commodity strategy at ING Groep NV.