Oil prices surged at the start of the new year, driven by optimism over China’s economic growth. On Thursday, Brent Oil Futures rose 1.3% to $72.69 a barrel, while Crude Oil WTI Futures jumped 1.3% to $75.62 a barrel.
China’s factory activity showed modest growth in December, according to a Caixin/S&P Global survey. The data also hinted at the implementation of more stimulus policies by President Xi Jinping in 2025. API reports confirmed that US oil inventories fell by 1.4 million barrels last week, indicating an increase in demand for crude oil.
The decrease in inventories is seen as a positive sign, with traders buying back into the oil market and driving up prices. However, concerns about oversupply remain, particularly due to expected increases in production from non-OPEC countries. The International Energy Agency expects the oil market to be adequately supplied despite rising demand forecast for 2025.
Traders are cautious about the outlook, weighing the impact of rising supply against tepid demand recovery. As China’s economy revives, oil prices are expected to rise, driven by increased demand and production growth.
Source: https://www.investing.com/news/commodities-news/oil-prices-rise-as-us-stockpiles-shrink-markets-assess-2025-outlook-3793451