Oil prices rose on Tuesday as China’s manufacturing activity expanded for a third straight month in December but at a slower pace, an official factory survey showed on Tuesday, suggesting a wave of fresh stimulus is helping to support the world’s second-largest economy.
China also issued at least 152.49 million metric tons of crude oil import quotas in a second batch for 2025, several sources said on Monday, taking next year’s total to 158.33 million tons, down from 182.69 million tons in 2024.
Oil prices were on track to end 2024 with a second straight year of losses, though they edged higher on Tuesday after data showed China’s manufacturing activity expanded in December.
Brent crude futures were up 54 cents, or 0.73%, at $74.53 a barrel as of 0700 GMT. U.S. West Texas Intermediate crude rose 57 cents, or 0.8%, to $71.56 a barrel.
At these levels, Brent is down about 3.3% from its final 2023 closing price of $77.04, while WTI is little changed from where it settled on Dec. 29 last year at $71.65.
In September, Brent crude futures closed below $70 a barrel for the first time since December 2021, while its 2024 closing high of $91.17 was also the lowest since 2021, as the effects of the post-pandemic demand recovery and price shocks from Russia’s invasion of Ukraine in 2022 begin to fade.
Weaker demand forecasts in China in particular have forced the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency to cut their oil demand growth forecasts for 2024 and 2025.
Key developments shaping the global energy landscape in 2024
The global energy landscape in 2024 has been defined by a series of developments: increased adoption of renewable energy, transformative geopolitical strategies, and continued efforts by leading oil-producing countries to stabilize prices through voluntary cuts.
The ongoing war between Russia and Ukraine and the conflict in the Middle East significantly impacted the global energy landscape, prompting countries to diversify energy sources and enhance energy security. The European Union announced new sanctions packages throughout the year.
This year, at COP29, more than 30 countries pledged to use nuclear power to achieve a climate-neutral world and increase the role of nuclear power in the global energy mix.
Turkey has supported the goal by backing a declaration to triple nuclear power by 2050 and advancing the Akkuyu nuclear power plant, which expects to start generating power in 2025.
OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers, extended production cuts through 2026, signaling continued efforts to stabilize oil markets.
Here are the key energy events that shaped the year, in chronological order:
On Jan. 18, China announced the discovery of a lithium mine with reserves approaching 1 million tons in Yanjing, southwest China’s Sichuan province, according to China’s Xinhua News Agency. The discovery is expected to help provide raw materials for China’s sprawling electric vehicle sector.
On Jan. 26, the Joe Biden administration in the United States decided to temporarily halt the approval process for liquefied natural gas exports in response to pressure from environmental groups.
On February 15, the European Union approved €6.9 billion ($7.4 billion) in state aid for infrastructure projects to increase renewable hydrogen supplies.
Oil prices rise on China optimism, sanctions
Oil prices have been boosted over the holiday period by improving optimism over China, U.S.-led sanctions on Iran, OPEC discipline and forecasts of cold weather hitting the U.S. and Europe.
But the energy rally was led by natural gas, with U.S. Henry Hub futures up more than 15% on Monday, while cold weather across Europe and falling inventories supported the TTF.
Cold weather is also playing a role in oil demand, including the potential for a shift from gas to oil if gas prices continue to rise.
European gasoline barge cracks rose about $1 a barrel on Monday, nearing a two-week high, although distillate margins continued to underperform.
Despite the December rally, crude benchmarks headed for their lowest year-end price since the 2020 pandemic, with Brent closing out 2023 at more than $77 a barrel. However, WTI was in line with a 2023 close at $71.65 a barrel.
China Markets got an extra boost on Tuesday as data showed manufacturing activity in China expanded for a third straight month, suggesting that various stimulus measures are working their way through the economy.
The official manufacturing PMI – a gauge of sentiment among factory owners – came in at 50.1 in December, indicating positive growth. However, the figure was down from 50.3 in November.
The data comes after Beijing agreed to issue more than $400 billion in special treasury bonds through 2025 in a bid to meet its GDP growth target of around 5%.
However, China faces several economic headwinds in the new year, including a struggling property sector and U.S. tariffs.
