Synopsis
On the first trading day of 2025, oil prices saw a modest increase, driven by optimism over China’s economic and fuel demand recovery following President Xi Jinping’s pledge to promote growth. Investors are cautiously gauging U.S. President-elect Donald Trump’s proposed tariffs, impacting crude oil’s movements. Agencies Oil prices rose on the first trading day of 2025, influenced by China’s economic recovery and President Xi’s growth-promoting pledge. Oil prices nudged higher on Thursday, the first day of trade for 2025, as investors returning from holidays cautiously eyed a recovery in China’s economy and fuel demand following a pledge by President Xi Jinping to promote growth.
Brent crude futures rose 46 cents, or 0.6%, to $75.10 a barrel by 0128 GMT after settling up 65 cents on Tuesday, the last trading day for 2024. U.S. West Texas Intermediate crude futures gained 49 cents, or 0.7%, to $72.21 a barrel after closing 73 cents higher in the previous session.
China’s Xi said on Tuesday in his New Year’s address that the country would implement more proactive policies to promote growth in 2025.
In an official survey released on Tuesday, China’s manufacturing activity barely grew in December though services and construction recovered. The data suggested policy stimulus is trickling into some sectors as China braces for new trade risks from tariffs proposed by U.S. President-elect Donald Trump.
Traders are returning to their desks and probably weighing higher geopolitical risks and also the impact of Trump running the U.S. economy red hot versus the impact of tariffs, IG market analyst Tony Sycamore said.
“Today’s China Caixin PMI release and tomorrow’s US ISM manufacturing release will be key to crude oil’s next move,” he added.
Sycamore said WTI’s weekly chart is winding itself into a tighter range, which suggests a big move is coming.
“Rather than trying to predict in which way the break will occur, we would be inclined to wait for the break and then go with it,” he added.
Investors are also awaiting weekly U.S. oil stocks data from the Energy Information Administration which has been delayed until Thursday due to the New Year holiday.
U.S. crude oil and distillate
Read More