Oil prices rose by 2% on Thursday as investors returned to the market with a positive outlook on China’s economy and fuel demand after President Xi Jinping pledged to promote growth in 2025. Brent crude futures increased $1.65, or 2.2%, to $76.29 a barrel, while US West Texas Intermediate crude climbed $1.75, or 2.4%, at $73.47.
Weaker-than-expected Chinese data on factory activity raised hopes of further stimulus, but swelling fuel inventories in the US limited gains. Gasoline stocks surged by 7.7 million barrels to 231.4 million barrels, while distillate stockpiles increased by 6.4 million barrels to 122.9 million barrels.
Analysts say weaker Chinese data is seen as positive for oil prices because it could prompt Beijing to accelerate its stimulus programme. However, investors are also watching US manufacturing data and oil inventories for guidance on crude oil’s next move.
According to a Reuters poll, oil prices are likely to be constrained near $70 a barrel in 2025 due to weak Chinese demand and rising global supplies. The market is expected to be influenced by the impact of tariffs proposed by President-elect Donald Trump on US trade.
Source: https://www.reuters.com/business/energy/oil-rises-investors-return-holidays-eye-china-recovery-2025-01-02