Jan 03, 2025 (MarketLine via COMTEX) --
Crude oil prices increased overall during the week on hopes of a growth revival in China amid signs of additional stimulus packages being developed to prop-up the economy. Nevertheless, the country continued to exhibit sluggish economic activity that could potentially impact the crude oil consumption from this major market. Prices also received support from speculation that new possible sanctions from Europe and the US might hamper crude supplies from Russia and Iran in 2025.
Some key factors that led to changes in crude oil prices this week are as follows:
- Oil prices rose slightly on Monday, supported by optimism that the recent fiscal incentives introduced in China would have a positive impact on its economy in 2025. The country lowered its key benchmark rates in Q4 2024 and is expected to announce an even larger stimulus in near future to revive consumption.
- Oil prices rose further on Tuesday, ahead of the New Year’s Day holiday on Wednesday, supported by prospects of tighter sanctions on crude exporters Iran and Russia that might lower the availability of crude oil in global markets. While Europe has recently agreed over fresh sanctions on Russia’s shadow tanker fleet, the US is likely to impose new measures to curb Iran’s oil exports once Donald Trump takes office later in January 2025. However, the upside to prices was largely restrained by prevailing worries over faltering industrial output from China, the world’s second-largest consumer of crude oil. As per China’s National Bureau of Statistics, the manufacturing Purchasing Manager’s Index (PMI) for December 2024 stood at 50.1, down from the 50.3 recorded in the previous month.
- Oil prices gained last Thursday and then rose further on Friday, supported by growing likelihood of China launching new incentives to boost its economic growth. During his New Year’s address, President Xi Jinping hinted at favorable policy measures that would spur growth within the country. This was followed by the announcement of wage hike for all government employees that would potentially lift the domestic spending by around $20 billion. Prices also received support from a weekly decline in the US crude inventory. According to the US Energy Information Administration (EIA), crude inventory in the country drew by 1.2 million barrels for the week ending on December 27, 2024. However, the country’s gasoline and distillate stockpiles surged by 7.7 million barrels and 6.4 million barrels, respectively, during the same week. This rise in US fuel inventory during the Christmas holiday week somewhat restricted the upside to prices.
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COMTEX_461722805/2227/2025-01-10T02:36:33
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