Oil rises on expanding Chinese factory activity, but will be lower by the end of the year Reuters
SINGAPORE (Reuters) – Oil prices rose in early trade on Tuesday after data showed Chinese manufacturing activity rose in December, but for the second straight year oil is on course to end lower on concerns about demand in top consumer countries.
Futures were up 47 cents, or 0.7%, at $74.46 a barrel by 0130 GMT. U.S. West Texas Intermediate crude gained 49 cents, or 0.7%, to $71.48 a barrel. On the year, Brent fell by 3.2%, while WTI fell by 0.6%.
Manufacturing activity in China rose for a third month in a row in December, but at a slower pace, an official survey of factories showed on Tuesday, suggesting a flash of fresh stimulus is helping to prop up the world’s second-largest economy.
Chinese authorities also agreed to issue a record 3 trillion yuan ($411 billion) in special government bonds in 2025 to revive economic growth, Reuters reported last week.
While a weak long-term demand outlook weighed on prices, they could find near-term support in falling inventories, which were expected to fall by about 3 million barrels last week.
Both Brent and WTI were boosted by a larger-than-expected draw in U.S. crude inventories in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand. [EIA/S]
