Oil rises as investors return from vacation and set their sights on China’s recovery, by Reuters

Written by Florence Tan

SINGAPORE (Reuters) – Oil prices rose on Thursday, the first trading day of 2025, as investors returning from the holidays cautiously eyed a recovery in China’s economy and fuel demand after President Xi Jinping pledged to boost growth.

By 0547 GMT, futures rose 17 cents, or 0.06 percent, to $74.82 per barrel after rising 65 cents on Tuesday, the last trading day in 2024. US West Texas Intermediate crude futures gained 19 cents, or 0.26 percent, To $71.91 per barrel. To close up 73 cents in the previous session.

Chinese President Xi Jinping said Tuesday in his New Year’s speech that the country will implement more proactive policies to boost growth in 2025.

Factory activity in China grew in December, according to a Caixin/S&P Global private sector survey on Thursday, but at a slower pace than expected amid concerns about the trade outlook and risks from tariffs proposed by US President-elect Donald Trump.

The data was consistent with an official survey released on Tuesday that showed that manufacturing activity in China barely grew in December, despite a recovery in services and construction. The data suggests that political stimulus is flowing to some sectors as China braces for new trade risks.

Traders are returning to their desks and perhaps weighing higher geopolitical risks as well as the impact of Trump’s management of the US economy versus the impact of tariffs, said Tony Sycamore, a market analyst at IG.

“Tomorrow’s US manufacturing ISM release will be key to what’s next for crude oil,” Sycamore added.

Sycamore said the weekly chart for WTI is trending into a narrower range, indicating a big move is coming.

“Instead of trying to predict which way the break will happen, we tend to wait for the break and then go with it,” he added.

Investors are also awaiting weekly US oil inventory data from the Energy Information Administration, which was delayed until Thursday due to the New Year’s holiday.

Oil and distillate inventories are expected to decline last week while gasoline inventories are likely to rise, an expanded Reuters poll showed on Tuesday. (Environmental Impact Assessment/Environmental Assessment)

U.S. oil demand rose to its highest levels since the pandemic in October at 21.01 million barrels per day, an increase of about 700,000 barrels per day from September, Energy Information Administration data showed on Tuesday.

The report showed that crude production from the world’s largest producer rose to a record level of 13.46 million barrels per day in October, an increase of 260,000 barrels per day from September.

In 2025, oil prices are likely to remain tied near $70 a barrel, down for a third year after a 3% decline in 2024, as weak Chinese demand and rising global supplies offset OPEC+ efforts to support the market, according to a monthly Reuters poll. Show.

In Europe, Russia halted gas exports via Soviet-era pipelines that pass through Ukraine on New Year’s Day. The widely expected stoppage will not affect prices for EU consumers, as some buyers have arranged alternative supplies, while Hungary will continue to receive Russian gas via the TurkStream pipeline under the Black Sea.