Oil prices climbed over 1% on Monday, driven by robust factory activity in China— the world’s second-largest oil consumer—and renewed unrest in the Middle East, where Israel resumed strikes on Lebanon despite a ceasefire agreement.
By 1203 GMT, Brent crude futures rose by 84 cents (1.17%), reaching $72.68 per barrel, while U.S. West Texas Intermediate crude gained 79 cents (1.16%) to settle at $68.79 per barrel.
“The stronger-than-expected economic data from China is alleviating previous concerns about weakened demand from the region,” noted Giovanni Staunovo, an analyst at UBS. He further explained that recent stimulus measures are starting to enhance economic activity, likely bolstering China’s oil consumption in the months ahead.
A private survey revealed China’s factory activity in November expanded at its fastest pace in five months, raising optimism among Chinese firms even as U.S. President-elect Donald Trump intensified trade-related rhetoric.
Meanwhile, the fragile ceasefire between Israel and Lebanon remains under scrutiny. Tensions escalated as both nations accused each other of violating the truce. The Lebanese health ministry reported casualties from two Israeli strikes in southern Lebanon, while Syria experienced intensified airstrikes as President Bashar al-Assad vowed to crush insurgents in Aleppo.
Last week, oil benchmarks faced declines of over 3% due to reduced supply concerns surrounding the Israel-Hezbollah conflict and anticipated surpluses for 2025. These pressures outweighed expectations of continued output cuts.
OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) has postponed its meeting to December 5 and is deliberating a potential delay of the planned production increase initially set for January. George Pavel, General Manager at Naga.com Middle East, emphasized, “A prolonged delay in the production hike could help ease the downward pressure on oil prices.”
Market participants are also awaiting clarity on the implications of both OPEC+ supply policies and the incoming U.S. administration’s stance on energy. “Money managers are cautious, seeking direction on how these factors will shape the market,” said Harry Tchilinguirian, Head of Research at Onyx Capital Group.
A Reuters oil price poll estimates that Brent crude will average $74.53 per barrel in 2025.
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