08:49 AM EST, 12/11/2024 (MT Newswires) -- Oil prices rose early on Wednesday as China's decision on Monday to loosen monetary policy continues to support the commodity. The gains come even as OPEC lowered its demand forecast for this year and next and a report showed an unexpected rise in U.S. inventories.

West Texas Intermediate crude for January delivery was last seen up US$0.89 to US$69.48 per barrel, while February Brent crude was up US$0.86 to US$73.05.

In its Monthly Oil Market Report released on Wednesday OPEC again lowered its demand-growth forecast for 2024 and 2025 demand. The cartel trimmed its outlook for this year by 210,000 barrels per day to 1.6-million bpd, while cutting its 2025 outlook by 90,000 bpd to to 1.4-million bpd. The report expects demand in developed countries to rise by just 100,000 bpd next year, with 1.3-million bpd of new demand coming from less developed economies.

The American Petroleum Institute's weekly survey released on Tuesday showed U.S. oil inventories rose by 0.5-million barrels last week, while the consensus estimate from analysts polled by Oilprice.com expected a drop of 1.23-million barrels. The Energy Information Administration will release official data.

The bearish notes are still being being outshone by China's Monday decision to loosen monetary policy for the first time in 14 years ahead of the country's Central Economic Work Conference as it looks to stimulate an economy struggling to cope with weak consumer spending and disinflation. The No.1 oil importer was the largest source of demand growth until this year and traders are hoping the stimulus measures will revive the country's appetite for oil, even as President-elect Donald Trump promises to impose punishing tariffs on China's exports to the United States.

"Whatever measures might emerge from the Central Economic Work Conference, and there is growing belief or fear in fact, that it will be a watered-down affair, they will unlikely trump (Trump) the tariff narrative. Tinker all it likes with interest rates, unless the PBoC/Conference/Communist Party comes up with anything other than supply side assistance as it has done all year, there is little reason to believe that the China malaise will not continue," oil brokers PVM Oil Associates noted.