Onome Amuge
Oil prices crept upward on the first day of trade in 2025, as investors, back from their holiday break, adopted a cautious stance while assessing the potential for a rebound in Chinese economic activity and fuel demand, buoyed by President Xi Jinping’s commitment to drive growth in the world’s second-largest economy.
Brent crude futures inched up 17 cents, or 0.06 percent, to $74.82 a barrel after settling 65 cents higher on Tuesday, the final trading day of 2024. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures edged up 19 cents, or 0.26 percent, to $71.91 a barrel, following a 73 cent gain in the previous session.
The Chinese economy appears set for a potential rebound in 2025, as President Xi Jinping committed to implementing more proactive policies to drive growth in his New Year’s address.
However, China’s factory activity expansion slowed in December, according to the Caixin/S&P Global survey released on Thursday, reflecting a challenging trade outlook and concerns over the impact of potential tariffs suggested by incoming U.S. President Donald Trump.
Echoing the Chinese government’s manufacturing survey released on Tuesday, data from the Caixin/S&P Global survey released on Thursday revealed that China’s manufacturing sector barely grew in December.
However, services and construction sectors recovered, indicating that policy stimulus is starting to benefit some segments of the economy, even as China gears up for potential new trade challenges.
U.S. oil investors are still anticipating weekly U.S. oil stocks data from the Energy Information Administration (EIA), which has been delayed until Thursday due to the New Year holiday.
Demand for U.S. oil reached its highest levels since the onset of the COVID-19 pandemic in October, hitting 21.01 million barrels per day (bpd), marking a 700,000 bpd increase from September, according to the latest data from the EIA released on Tuesday.
Meanwhile, U.S. crude output reached a record high of 13.46 million bpd in October, up 260,000 bpd from the previous month, per the EIA report.
