Brent crude futures were up $1.65, or 2.2%, at $76.29 a barrel by 11:17 am EST (1617 GMT) after rising 65 cents on Tuesday, the last trading day of 2024. US West Texas Intermediate crude climbed $1.75, or 24%. , at $73.47.
Xi said in his New Year’s address on Tuesday that China will implement more proactive policies to promote growth in 2025.
China’s factory activity rose in December, the Caixin/S&P Global Survey showed on Thursday, but at a slower pace than expected, amid concerns about how tariffs proposed by US President-elect Donald Trump would affect trade.
The data echoed an official survey released on Tuesday, which showed that China’s manufacturing activity barely picked up in December. Although services and construction have fared better, the data suggest that policy stimulus is moving in some sectors.
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The weak Chinese data is seen by some analysts as positive for oil prices as it could prompt Beijing to accelerate its stimulus program.
Swelling fuel inventories in the United States, however, limited benefits.
US oil stock data from the Energy Information Administration on Thursday, which was released a day later than usual due to the New Year holiday, showed that gasoline and distillate inventories rose last week.
US gasoline stocks rose 7.7 million barrels to 231.4 million barrels in the week, while distillate stockpiles, which include diesel and heating oil, rose 6.4 million barrels to 122.9 million barrels in the week.
Crude stockpiles, meanwhile, fell less than expected, falling 1.2 million barrels to 415.6 million barrels last week, compared with analysts’ expectations in a Reuters poll for a 2.8-million-barrel draw.
As traders return to their desks, they may be weighing higher geopolitical risks and the expected impact of Trump tariffs driving the US economy red hot, said IG Markets analyst Tony Sycamore.
“Tomorrow’s US ISM manufacturing release will be key to crude oil’s next move,” Sycamore said.
Sycamore said WTI’s weekly chart is turning itself into a tighter range, suggesting a bigger move is coming.
“Instead of trying to predict which way the break will go, we tend to wait for the break and then go with it,” he added.
Oil prices are likely to remain capped near $70 a barrel in 2025, a third straight year after a 3% decline in 2024, as weak Chinese demand and rising global supplies offset OPEC+ efforts to prop up the market, a Reuters poll showed.
In Europe, Russia halted gas pipeline exports through Ukraine on New Year’s Day after a transit agreement expired on December 31. The European Union has arranged alternative supplies ahead of a widely expected stoppage when Hungary will receive Russian gas through the TurkStream pipeline. black sea
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