China's Growth Fails to Boost Oil Prices

31 Dec 2024 , 11:07 AM

Early Tuesday trading saw an increase in oil prices as statistics indicated that China’s manufacturing activity increased in December. However, for the second year in a row, oil was expected to finish down due to concerns about demand among the world’s top consumers.

Brent crude futures were up 47 cents, or 0.7%, to $74.46 a barrel. At $71.48 per barrel, U.S. West Texas Intermediate crude increased 49 cents, or 0.7%. WTI fell 0.6% for the year, while Brent fell 3.2%.

According to an official factory survey released on Tuesday, China’s manufacturing activity grew for a third consecutive month in December, albeit more slowly, indicating that the world’s second-largest economy is being supported by a flurry of new stimulus.

According to a Reuters story last week, Chinese officials have also decided to issue a record 3 trillion yuan ($411 billion) in special treasury notes in 2025 in an effort to boost economic growth.

Although prices have been impacted by a poor prognosis for longer-term demand, they may find short-term support from the predicted 3 million barrel drop in U.S. oil stockpiles last week.

A greater-than-expected drop from U.S. crude stocks in the week ending December 20 helped both Brent and WTI as refiners increased their output and fuel consumption increased due to the Christmas season.

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