SINGAPORE (Reuters) – Oil prices rose on Tuesday after data showing China’s manufacturing activity expanded in December, but are on track to end a second straight year of declines due to demand concerns in top consumers. .
At 0730 GMT, futures were up 57 cents, or 0.8%, at $74.56 a barrel. U.S. West Texas Intermediate crude rose 58 cents, or 0.8%, to $71.57 a barrel. For the year, Brent fell 3.2% and WTI fell 0.1%.
China’s manufacturing activity expanded for a third straight month in December, but the pace slowed, an official factory survey showed on Tuesday, as a new blitz of stimulus props up the world’s second-largest economy. It was suggested that.
Reuters reported last week that Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special bonds in 2025 to revive economic growth.
The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) have both been forced to downwardly revise their oil demand forecasts for 2025 due to the weak outlook for Chinese demand.
OPEC and its allies have postponed plans to ramp up production until April 2025 due to falling prices. The IEA expects global oil supply to exceed demand in 2025, even if OPEC+ production cuts continue, as production increases from the U.S. and other oil-producing countries outweigh weak demand.
A weak long-term demand outlook is weighing on prices, but falling inventories, which are expected to fall by about 3 million barrels last week, could provide short-term support.
Both Brent and WTI stocks were supported by stronger-than-expected U.S. crude oil inventories in the week ending Dec. 20, on increased refinery production activity and higher demand for fuel from the holiday season. . [EIA/S]
Investors will be focused on the Fed’s interest rates next year after the central bank said earlier this month it expected to cut interest rates only two times, down from four in September, citing persistently high inflation. Probably.
Lower interest rates are generally expected to encourage borrowing, promote growth, and, in turn, increase oil demand.
Changing expectations about U.S. interest rates and widening interest rate differentials between the U.S. and other countries are pushing up the dollar and putting pressure on other currencies.
A strong dollar has made oil more expensive for consumers outside the U.S., weighing on demand.
Markets are also bracing for President-elect Donald Trump’s measures to deregulate, cut taxes, raise tariffs and tighten immigration, which are expected to both boost growth and boost inflation.
