Dec 2 2024: Oil prices climbed on Monday, bolstered by upbeat manufacturing data from China and renewed violence in the Middle East, as Israel resumed strikes on Lebanon despite a ceasefire agreement.
Brent crude futures gained 0.79%, reaching $72.41 a barrel, while U.S. West Texas Intermediate crude rose 0.85% to $68.58.
China’s Manufacturing Boosts Oil Demand Prospects
China’s manufacturing activity grew at its fastest pace in five months, signaling potential stability in oil demand. The expansion comes amid the country’s recent stimulus efforts, offering a glimmer of hope for the global oil market despite broader economic concerns.
Middle East Tensions Add Supply Risks
The fragile truce between Israel and Lebanon came under strain, with both sides accusing each other of violations. Israeli strikes in southern Lebanon and intensifying air raids in Syria raised fears of escalating regional tensions, which could impact oil supply.
OPEC+ Meeting Postponed Amid Surplus Concerns
OPEC+ postponed its December meeting to assess the impact of global developments, including U.S. President-elect Donald Trump’s trade policies and China’s economic response. The group is expected to delay planned output hikes to address concerns over surplus supply, which has pressured oil prices in recent weeks.
Oil Price Outlook
Brent crude is forecast to average $74.53 per barrel in 2025, reflecting a downward revision due to economic uncertainties in China and sufficient global supply. Analysts suggest that OPEC+’s decision on production cuts could significantly influence price trajectories in the coming months.
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