Oil Prices Rise as China’s Manufacturing Activity Expands
Prices of crude oil climbed on Thursday as economic activity in China began to pick up. The international oil benchmark of Brent crude rose by 0.2% to $72.29 per barrel during an early session in the global commodities market.
The US benchmark West Texas Intermediate also climb by 0.2% to $68.76 per barrel. China’s latest purchasing manager index (PMI) data showed manufacturing activity expanded for the first time in six months in October.
“We’ll need to see if the stimulus rollout can lead to a recovery of domestic demand to offset potentially softer external demand picture,” ING analysts say.
On the down side, US economic growth data for the third quarter underperformed analysts’ expectations. According to the Commerce Department’s first advance reading released on Wednesday, the US economy expanded 2.8% in the third quarter of 2024. The figure came under market estimates of a 3% growth.
The American economy expanded by 3% in the second quarter of 2024. The data indicating lower-than-expected economic growth placed downward pressure on oil prices. However, some experts believe that this data suggests the country’s economy is maintaining a stable growth rate ahead of the upcoming presidential elections in the US.
Also, the possibility of a cease-fire in the Middle East, where major oil producers and trade routes reside, aided the decline in oil prices. Qatar announced on Tuesday that mediation efforts to establish a ceasefire in Gaza are ongoing, expressing optimism for an agreement amid intensified violence.
‘The efforts are ongoing, and we hope for a breakthrough,’ Foreign Ministry spokesperson Majed al-Ansari said at a press conference in Doha, following a recent round of talks hosted by Qatar.
A recent round of talks in Qatar has also included discussions between Israeli Mossad chief David Barnea, CIA Director William Burns, and Qatar’s Prime Minister Mohammed bin Abdulrahman Al Thani, with Sunday’s session reportedly focused on a potential deal with Palestinian resistance group Hamas involving prisoner exchanges and a cease-fire.
Meanwhile, data from the US Energy Information Administration (EIA) released late Wednesday limited downward price movements by alleviating demand concerns amid market players as inventories unexpectedly fell.
US commercial crude oil inventories decreased by around 500,000 barrels to 425.5 million barrels, against the market prediction of 1.5 million barrels rising during the week ending Oct. 25. Over the same period, gasoline inventories declined by around 2.7 million barrels to 210.9 million barrels. #Oil Prices Rise as China’s Manufacturing Activity Expands
