Oil prices experience rise
Date
12/31/2024 5:07:42 AM
(MENAFN) Oil prices saw a rise on Tuesday after data revealed that industrial activity in China expanded in December. However, oil is expected to close the year lower for the second consecutive year, mainly due to concerns about demand in key consuming countries. brent crude futures increased by 60 cents, or 0.8%, to $74.59 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 62 cents, or 0.9%, to $71.61 a barrel. Despite this uptick, Brent crude is down 3.2% for the year, and WTI crude has fallen 0.1%.
China’s manufacturing activity grew for the third consecutive month in December, although at a slower pace, indicating that new economic stimulus measures are helping to stabilize the world’s second-largest economy. Additionally, Chinese authorities have approved the issuance of 3 trillion yuan ($411 billion) in private treasury bonds for 2025 to support economic growth.The outlook for oil demand in China remains weak, prompting both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) to revise their oil demand forecasts downward for 2025. OPEC and its allies also delayed their plan to increase production until April 2025, citing low prices. The IEA anticipates that global oil supply will outpace demand next year, even with OPEC+ production cuts, as non-OPEC producers like the U.S. ramp up output.
Despite the pessimistic long-term demand outlook, oil prices may find short-term support from the anticipated drop in U.S. crude inventories, which are expected to have fallen by 3 million barrels in the previous week. Both Brent and WTI benefited from a larger-than-expected decline in U.S. oil inventories for the week ending December 20, as refineries increased activity to meet higher fuel demand during the holiday season.
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