Oil Extends Year-End Advance as China Factory Activity Expands

By Bloomberg

Dec 31, 2024

image is BloomburgMedia_SPBWTRT1UM0W00_31-12-2024_04-36-36_638712000000000000.jpg

Oil storage containers in Midland, Texas, US, on Thursday, Oct. 3, 2024. Oil steadied following its biggest one-day jump in almost a year as fears that Israel may decide to strike Iranian crude facilities in retaliation for a missile barrage kept the market on edge. Photographer: Anthony Prieto/Bloomberg

(Bloomberg) -- Oil pushed higher at the end of the year after factory activity expanded for a third month in China, the world’s top crude importer.

Brent rose for a third session toward $75 a barrel and West Texas Intermediate was above $71. China’s economy has been showing tentative signs of recovery following a raft of stimulus measures, though the nation faces the threat of a new trade war from the incoming Trump administration.

Crude has been stuck in a narrow trading range since mid-October, with Brent heading for a modest annual loss and WTI poised to end the year little changed. Bullish bets on the US benchmark reached a four-month high in the penultimate week of 2024 as investors positioned for a possible turbulent year ahead.

President-elect Donald Trump has already threatened tariffs on China, Canada and Mexico, while his pick for national security adviser has vowed “maximum pressure” on Iran. The market is also facing an oversupply in 2025, making it harder for OPEC and its allies to revive idled production.

Some banks have forecast crude prices will continue to weaken over the next two years, although a potential flare-up in hostilities in the Middle East or Ukraine could provide short-term support for oil.

By Weilun Soon