Oil rises on positive China data, amid ongoing Israel-Lebanon ceasefire tensions
Shafaq News/ Oil prices rose onMonday, supported by upbeat factory activity in China, the world's secondlargest oil consumer, and as Israel resumed attacks on Lebanon despite aceasefire pact, stoking tension in the Middle East.
Brent crude futures climbed 34cents, or 0.47%, to $72.18 a barrel by 0452 GMT while U.S. West TexasIntermediate crude was at $68.32 a barrel, up 32 cents, or 0.47%.
"Oil prices have managed tostabilise into the new week, with the continued expansion in China'smanufacturing activities reflecting some degree of policy success from recentstimulus efforts," said Yeap Jun Rong, market strategist at IG.
This offered some slight relief thatoil demand from China may hold for now, he added.
A private-sector survey showedChina's factory activity expanded at the fastest pace in five months inNovember, boosting Chinese firms' optimism just as U.S. President-elect DonaldTrump ramps up his trade threats.
Still, traders are eyeingdevelopments in Syria, weighing if they could widen tension across the MiddleEast, Yeap added.
A truce between Israel and Lebanontook effect on Wednesday, but each side accused the other of breaching theceasefire.
In a statement, the Lebanese healthministry said several people were wounded in two Israeli strikes in southLebanon. Air strikes also intensified in Syria, as President Bashar al-Assadvowed to crush insurgents who had swept into the city of Aleppo.
Last week, both benchmarks suffereda weekly decline of more than 3%, on easing concerns over supply risks from theIsrael-Hezbollah conflict and forecasts of surplus supply in 2025, even asOPEC+ is expected to extend output cuts.
The Organization of the PetroleumExporting Countries and their allies, known as OPEC+, postponed its meeting toDec. 5 and is discussing delaying its oil output hike due to start in January,OPEC+ sources told Reuters last week.
This week's meeting will decidepolicy for the early months of 2025.
"The extension of output cutswould allow OPEC+ more time to assess the impact of Trump's policyannouncements with regards to tariffs and energy and also to see what China'sresponse will be," said Tony Sycamore, IG's Sydney-based market analyst.
Since the group's production hikehad been widely expected, the market's focus may be on the extent of delay tosway crude prices, said IG's Yeap.
"An indefinite delay may be thebest case for oil prices, given that earlier rounds of delays by a month or sohave failed to drive higher oil prices in line with what OPEC+ intended."
Brent is expected to average $74.53per barrel in 2025 as economic weakness in China clouds the demand picture andample global supplies outweigh support from an expected delay to a plannedOPEC+ output hike, a Reuters monthly oil price poll showed on Friday.
That is the seventh straightdownward revision in the 2025 consensus for the global benchmark, which hasaveraged $80 per barrel so far in 2024.
(REUTERS)
