Commodities and Futures News

Oil inches up on upbeat China data, shaky Israel-Lebanon ceasefire

2024.12.01 21:00

By Florence Tan

SINGAPORE (Reuters) – Oil prices edged up on Monday supported by upbeat factory activity in the world’s second largest oil consumer China and as Israel resumed attacks on Lebanon despite a ceasefire agreement, stoking tensions in the Middle East.

futures climbed 8 cents, or 0.1%, to $71.92 a barrel by 0107 GMT while U.S. West Texas Intermediate crude was at $68.09 a barrel, up 9 cents, or 0.1%.

Prices rose after an official survey showed that China’s factory activity expanded modestly for a second straight month in November, suggesting a blitz of stimulus is finally trickling through just as Donald Trump ramps up his trade threats.

“China data is helping, but I think it is also coming on concerns the Israel-Lebanon ceasefire may not hold,” IG’s Sydney-based market analyst Tony Sycamore said.

A truce between Israel and Lebanon came into effect on Wednesday but both sides have accused each other of breaching the ceasefire.

The Lebanese Health Ministry said in a statement several people were wounded in two Israeli strikes in south Lebanon. Air strikes also intensified in Syria as President Bashar al-Assad vowed to crush insurgents who had swept into the city of Aleppo.

Last week, both benchmarks posted a weekly decline of more than 3%, on easing concerns over supply risks from the Israel-Hezbollah conflict and forecasts of surplus supply in 2025 even as OPEC+ is expected to extend output cuts.

The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, postponed its meeting to Dec. 5 and is discussing delaying its oil output hike due to start in January, OPEC+ sources told Reuters last week. The meeting this week will decide policy for the early months of 2025.

“The extension of output cuts would allow OPEC+ more time to assess the impact of Trump’s policy announcements with regards to tariffs and energy and also to see what China’s response will be,” Sycamore said.

© Reuters. FILE PHOTO: An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS/File Photo

Brent is expected to average $74.53 per barrel in 2025 as economic weakness in China clouds the demand picture and ample global supplies outweigh support from an expected delay to a planned OPEC+ output hike, a Reuters monthly oil price poll showed on Friday.

That is the seventh straight downward revision in the 2025 consensus for the global benchmark, which has averaged $80 per barrel so far in 2024.



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