Oil prices steady as Syria concerns ease and China stimulus supports

By Paul Carsten

LONDON (Reuters) -Oil prices were little changed on Tuesday as concerns eased about the fallout from the overthrow of Syria's president while the market found support from Chinese stimulus that could boost demand from the world's biggest crude buyer.

Brent crude futures were down only 1 cent, or 0.01%, to $72.13 a barrel at 1408 GMT. U.S. West Texas Intermediate was up 11 cents, or 0.16%, at $68.48. Both benchmarks had risen more than 1% on Monday.

In Syria, rebels were working to form a government and restore order after the ousting of President Bashar al-Assad, with the country's banks and oil sector set to resume work on Tuesday.

"The tensions in the Middle East seem contained, which led market participants to price for potentially low risks of a wider regional spillover leading to significant oil supply disruption," said IG market strategist Yeap Jun Rong.

While Syria itself is not a major oil producer, it is strategically located and has had strong ties with Russia and Iran.

The power transfer, which followed 13 years of civil war and brought an end to more than 50 years of brutal rule by the Assad family, raised concerns over regional instability.

Oil prices could receive a boost if the U.S. Federal Reserve comes through with an expected 25 basis point cut to interest rates when it meets over Dec. 17-18. That could juice oil demand in the world's biggest economy, though traders are waiting to see if this week's inflation data derails the cut.

Support also came from reports that China will adopt "appropriately loose" monetary policy in 2025 as Beijing tries to spur economic growth. This would be the first easing of its stance in 14 years, though details remain thin.

Chinese crude imports also grew annually for the first time in seven months, jumping in November from a year earlier.



The increase, however, "was more a function of stockpiling than demand improvement", said Tamas Varga of oil broker PVM.

"The economy will only be stimulated by improving consumer sentiment and spending, by a rise in domestic aggregate demand echoed in a healthy increase in consumer inflation," he added.

Source: Investing.com