Oil prices surged 2% on Thursday as investors returned to trading after the New Year, citing upbeat economic data from China and President Xi Jinping’s pledge to promote growth. Brent crude futures rose $1.47 to $76.11 a barrel, while US West Texas Intermediate crude climbed $1.62 to $73.34.
Analysts attribute the gains to positive Chinese economic data, which could prompt Beijing to accelerate its stimulus programme. This, in turn, is expected to boost fuel demand. However, weaker-than-expected factory activity data from China has raised concerns about the impact of proposed US tariffs on trade.
US oil stocks data showed a slight increase in gasoline and distillate inventories, while crude stockpiles fell less than expected. Despite this, oil prices are likely to remain constrained near $70 a barrel in 2025 due to weak Chinese demand and rising global supplies.
Analysts warn of higher geopolitical risks under the new US administration, which may impact oil prices. The upcoming ISM manufacturing release will be crucial in determining crude oil’s next move.
Source: https://www.cnbc.com/2025/01/02/oil-rises-as-investors-return-from-holidays-eye-china-recovery.html