Oil rises as investors return from holidays, eye China recovery
ShafaqNews/ Oil prices nudged higher on Thursday, the first day of trade for 2025, asinvestors returning from holidays cautiously eyed a recovery in China’s economyand fuel demand following a pledge by President Xi Jinping to promote growth.
Brentcrude futures rose 46 cents, or 0.6%, to $75.10 a barrel by 0128 GMT aftersettling up 65 cents on Tuesday, the last trading day for 2024. U.S. West TexasIntermediate crude futures gained 49 cents, or 0.7%, to $72.21 a barrel afterclosing 73 cents higher in the previous session.
China’sXi said on Tuesday in his New Year’s address that the country would implementmore proactive policies to promote growth in 2025.
Inan official survey released on Tuesday, China’s manufacturing activity barelygrew in December though services and construction recovered. The data suggestedpolicy stimulus is trickling into some sectors as China braces for new traderisks from tariffs proposed by U.S. President-elect Donald Trump.
Tradersare returning to their desks and probably weighing higher geopolitical risksand also the impact of Trump running the U.S. economy red hot versus the impactof tariffs, IG market analyst Tony Sycamore said.
“Today’sChina Caixin PMI release and tomorrow’s US ISM manufacturing release will bekey to crude oil's next move,” he added.
Sycamoresaid WTI’s weekly chart is winding itself into a tighter range, which suggestsa big move is coming.
“Ratherthan trying to predict in which way the break will occur, we would be inclinedto wait for the break and then go with it,” he added.
Investorsare also awaiting weekly U.S. oil stocks data from the Energy InformationAdministration which has been delayed until Thursday due to the New Yearholiday.
U.S.crude oil and distillate stockpiles are expected to have fallen last week whilegasoline inventories likely rose, an extended Reuters poll showed on Tuesday.U.S. oil demand surged to the highest levels since the pandemic in October at21.01 million barrels per day (bpd), up about 700,000 bpd from September, EIAdata showed on Tuesday.
Crude output from the world's topproducer rose to a record 13.46 million bpd in October, up 260,000 bpd fromSeptember, the report showed.
In2025, oil prices are likely to be constrained near $70 a barrel, down for athird year after a 3% decline in 2024, as weak Chinese demand and rising globalsupplies offset efforts by OPEC+ to shore up the market, a Reuters monthly pollshowed.
InEurope, Russia halted gas exports via Soviet-era pipelines running throughUkraine on New Year’s Day. The widely expected stoppage will not impact pricesfor consumers in the European Union as some buyers have arranged alternativesupply, while Hungary will keep receiving Russian gas via the TurkStreampipeline under the Black Sea.
(Reuters)
