Oil prices increased on Thursday as investors returned to the market with optimism about China’s economy and fuel demand.
Brent crude futures rose by 65 cents, or 0.87%, to $75.29 per barrel, while U.S. West Texas Intermediate crude gained 66 cents, or 0.92%, reaching $72.38.
China’s President Xi Jinping pledged to implement more proactive policies to boost growth in 2025, which fueled investor optimism. A survey showed China’s factory activity grew in December, though at a slower pace than expected, raising concerns about the impact of proposed U.S. tariffs.
The data also suggested that some sectors like services and construction are benefiting from policy stimulus. Analysts believe weaker economic data in China could lead to more stimulus measures, which could support oil prices.
Investors are also waiting for the U.S. oil stocks data, which was delayed to Thursday due to the New Year holiday. It is expected that U.S. crude and distillate stockpiles fell last week, while gasoline inventories increased.
In October, oil demand reached the highest level since the COVID-19 pandemic at 21.01 million barrels per day, according to the U.S. Energy Information Administration (EIA). Crude production in the U.S. also hit a record high of 13.46 million barrels per day in October.
In Europe, Russia halted gas pipeline exports through Ukraine on New Year’s Day after the transit agreement expired. The European Union has arranged alternative supplies, and Hungary will continue receiving Russian gas through the TurkStream pipeline.
