By Paul Carsten
LONDON (Reuters) -Oil prices slipped on Tuesday as concerns eased about the fallout from the overthrow of Syria’s president, despite support from China’s plan to ramp up policy stimulus – a potential boost to demand from the world’s biggest crude buyer.
futures fell 24 cents to $71.90 per barrel at 1009 GMT. U.S. West Texas Intermediate was down 28 cents at $68.09. Both benchmarks had risen more than 1% on Monday.
In Syria, rebels were working to form a government and restore order after the ouster 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 over 50 years of brutal rule by the Assad family, raised concerns of regional instability.
Oil prices may get a boost if the Federal Reserve comes through with expected rate cuts of 25 basis points when it meets on 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 derail the cut.
Oil’s losses were also offset by reports that China will adopt an “appropriately loose” monetary policy in 2025 as Beijing tries to spur economic growth. This would be the first easing of its stance in some 14 years, though details remain thin.
China crude imports also grew annually for the first time in seven months, jumping in November from a year earlier.
But that increase “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.”