Oil Prices Climb as Chinese Factory Activity Grows Despite Year-End Dip
Oil prices increased due to rising Chinese manufacturing, but concerns about demand suggest a lower year-end finish for crude.
Oil, China, Brent Crude, WTI, Manufacturing, Economy
SINGAPORE: So, oil prices are on the rise again! They jumped a bit after we got news that China’s manufacturing is picking up. But here’s the kicker: even with this boost, oil is still set to finish the year lower. It’s been a tough year for crude, especially with worries about demand from the big players.
Brent crude is up by 47 cents, hitting $74.46 a barrel, while U.S. West Texas Intermediate is up 49 cents to $71.48. But looking back, both have dropped for the year—Brent down 3.2% and WTI down 0.6%. Not exactly what oil investors were hoping for.
China’s manufacturing has been expanding for three months now, but the pace is slowing down. This is a sign that the government’s efforts to stimulate the economy are working, but it’s a mixed bag. They’re even planning to issue a whopping 3 trillion yuan in special treasury bonds next year to keep things moving.
Even though the long-term outlook for demand isn’t great, there’s some short-term hope. U.S. crude stockpiles are expected to drop by about 3 million barrels, which could help support prices a bit. Plus, the holiday season usually boosts fuel demand, so that’s a silver lining.
In the last week, both Brent and WTI saw a nice bump thanks to a bigger-than-expected drop in U.S. crude inventories. Refiners are ramping up their activity, which is good news for the market. Let’s see how this all plays out!