After finishing up 65 cents on Tuesday, Brent crude futures increased 46 cents, or 0.6%, to $75.10 a barrel by 0128 GMT. 2024’s final trading day. After finishing 73 cents higher the day before, U.S. West Texas Intermediate oil futures advanced 49 cents, or 0.7%, to $72.21 a barrel.
In his New Year’s speech on Tuesday, Chinese President Xi declared that the nation would adopt more aggressive policies to stimulate growth in 2025.
China’s manufacturing activity barely increased in December. Despite a recovery in services and construction, according to an official survey published on Tuesday. The data showed that as China prepares for new trade threats from tariffs proposed by U.S. President-elect Donald Trump. The policy stimulus is leaking into some sectors.
According to IG market analyst Tony Sycamore, traders are likely going back to their desks to assess the impact of tariffs against the impact of Trump’s dominance over the U.S. economy, as well as increased geopolitical concerns.
He also added
“Today’s China Caixin PMI release and tomorrow’s US ISM manufacturing release will be key to crude oil’s next move,”.
According to Sycamore, WTI’s weekly chart is constricting into a smaller range, indicating that a significant move is imminent.
He also added
“Rather than trying to predict in which way the break will occur, we would be inclined to wait for the break and then go with it,”.
The Energy Information Administration’s weekly U.S. oil stock data, which was postponed until Thursday because of the New Year holiday, is another item that investors are anticipating.
An extended Reuters poll released on Tuesday indicated that while gasoline inventories probably increased last week, U.S. crude oil and distillate stockpiles are expected to have decreased.
According to EIA data released on Tuesday, U.S. oil demand increased by around 700,000 barrels per day from September to 21.01 million barrels per day in October, the highest levels since the pandemic.
The world’s largest producer’s crude output increased by 260,000 barrels per day from September to a record 13.46 million barrels per day in October.
According to the Reuters monthly poll, oil prices are anticipated to remain low in 2025. It also hovered around $70 per barrel. For the third consecutive year after falling 3% in 2024, OPEC’s attempts to support the market were thwarted by poor Chinese demand and growing global supplies.
On New Year’s Day, Russia suspended gas supplies through Ukraine using pipes that date back to the Soviet era. While Hungary will continue to receive Russian gas through the TurkStream pipeline underneath the Black Sea. The much-anticipated halt will not affect prices for consumers in the European Union. Hence some buyers have secured alternate supplies.
