Oil prices rose on Thursday, the first trading day of 2025, as investors took a cautious look at China’s recovery and fuel demand after promising to stimulate growth.
Brent crude futures rose 17 cents, or 0.06%, to $74.82 a barrel by 0547 GMT after closing 65 cents higher on Tuesday, the last trading day of 2024. WTI crude futures rose 19 cents, or 0.26%, to $71.91 a barrel after closing 73 cents higher in the previous session.
Xi said in his New Year’s speech on Tuesday that the country will implement more proactive policies to stimulate growth in 2025.
China’s factory activity grew in December but happened at a slower pace than expected amid trade concerns over tariffs proposed by U.S. President-elect Trump.
China’s manufacturing activity barely grew in December, data showed Tuesday, while services and construction rebounded. That suggests policy stimulus is seeping into some sectors as China braces for new trade risks.
There were unexplained terrorist attacks in the U.S. on the last night of the year.
Traders returned to their desks, likely facing higher geopolitical risks and the impact of Trump’s tariffs.
Tomorrow’s U.S. ISM manufacturing announcement will be key to crude’s next move.
The weekly chart for WTI is moving into a tighter range, suggesting a big move is imminent. Experts will either have to speculate on how the breakout will happen or wait for it to happen and then act accordingly.
Investors are also awaiting weekly U.S. oil inventories data from the Energy Information Administration (EIA), which was delayed until Thursday because of the New Year holiday.
A survey on Tuesday showed that U.S. crude and distillate inventories were expected to fall last week, while gasoline inventories were likely to rise.
U.S. oil demand rose to 21.01 million barrels per day (bpd) in October, the highest since the pandemic, and about 700,000 bpd since September, according to the EIA data.
The report showed that crude output by the world’s largest producer rose by 260,000 bpd in October from September to a record 13.46 million bpd.
According to some surveys, oil prices are likely to remain near $70 a barrel in 2025, falling for a third straight year after a 3% drop in 2024, as weak Chinese demand and rising global supply offset efforts by OPEC+ to support the market.
In Europe, gas exports via Soviet-era pipelines through Ukraine halted on New Year’s Day. The widely expected halt will not affect prices for consumers in the European Union as some buyers turn to alternative supply sources, while Hungary will continue to receive Russian gas via the Turkish Stream pipeline under the Black Sea.
