Oil prices surge amid Trump’s policy concerns, China’s economic stimulus plans

Oil prices climbed in light trading ahead of the holidays, driven by heightened geopolitical tensions sparked by President-elect Donald Trump and reports of China’s ambitious plans to boost its economy through significant bond issuances, according to Bloomberg.

West Texas Intermediate (WTI) crude rose over 1.2%, closing above $70 per barrel, while Brent crude for February delivery increased by 1.3%, settling at $73.58 per barrel.

Base metals, including nickel, saw broad gains following a Reuters report suggesting China may issue a record 3 trillion yuan ($411 billion) in special bonds next year to revitalize its slowing economy. Crude oil futures crossed their 50-day moving average, prompting a wave of technical buying.

Markets evaluate Trump’s potential disruptions

Markets are closely analyzing Trump’s threats, including seizing control of the Panama Canal, imposing harsher sanctions on Iran, and introducing tariffs on China — moves that could ripple through global oil balances. However, a strong U.S. dollar, hovering near a two-year high, continues to cap commodity price gains.

Market strategist Yip Jun Rong of IG Asia Pte told Bloomberg, “The holiday season offers no respite from Donald Trump’s rhetoric, leaving markets questioning the likelihood and impact of his proposed actions.”

Trading activity reflects seasonal lull

WTI crude trading volumes dipped below daily averages and are expected to remain weak as markets wind down for the year-end holidays. Crude prices have been trading within a narrow range since mid-October, weighed down by geopolitical uncertainty, tepid demand from China—the world’s largest oil importer—and robust supply expectations from the Americas.

Looking ahead, OPEC+ is set to gradually unwind production cuts in 2025, adding to the challenges of balancing global oil markets.