Oil prices rose on Monday, supported by strong factory activity in China, the world’s second-largest oil consumer, escalating fighting in Syria and increasing tensions in the Middle East as Israel continues its offensive in Lebanon despite a ceasefire agreement.
Brent crude futures rose 57 cents, or 0.79%, to $72.41 a barrel by 0700 GMT, while WTI crude rose 58 cents, or 0.85%, to $68.58 a barrel.
Oil prices entered the new week on a steady note. China’s expanding output reflects policy success from recent stimulus efforts, providing some reassurance that the demand for oil from China may continue for now.
China’s factory activity rose at its fastest pace in five months in November, boosting optimism among Chinese firms against Trump’s trade threats.
Now, traders are watching developments in Syria and weighing whether they could escalate tensions in the Middle East. Fighting has intensified in Syria, with President Bashar al-Assad vowing to crush rebels who have entered the city of Aleppo.
A ceasefire between Israel and Lebanon came into effect on Wednesday, but both sides have accused the other of violating the ceasefire.
Both indexes fell more than 3% weekly last week as OPEC+ is expected to extend production cuts, concerns about supply risks from the Israel-Hezbollah conflict ease, and forecasts of oversupply in 2025.
OPEC+ postponed its meeting until Dec. 5 and is considering delaying the oil output increase that was scheduled to begin in January. This week’s meeting will set policy for the first months of 2025.
Extending the production cuts will give OPEC+ more time to assess the impact of Trump’s tariff and energy policy announcements, as well as see how China responds.
The market’s focus will be on the extent of the delay to impact crude prices, as the group is widely expected to increase production.
An indefinite delay may be the best-case scenario for oil prices, given that previous rounds of delays of a month or more have failed to lead to higher oil prices as OPEC+ had intended.
Brent is expected to average $74.53 a barrel in 2025, according to one survey, as economic weakness in China muddies the demand picture and ample global supplies weigh on support from the expected delay to the planned OPEC+ production increase.
That would be the seventh straight downward revision to the 2025 consensus for the global benchmark, which has averaged $80 a barrel so far in 2024.
