Oil rises as Chinese factory activity expands, but is expected to end the year on a decline, by Reuters

SINGAPORE (Reuters) – Oil prices rose in early trading on Tuesday after data showed China’s manufacturing activity grew in December, but oil was on track for a second straight year to close lower on demand concerns in major consuming countries.

Futures rose 47 cents, or 0.7 percent, to $74.46 a barrel by 0130 GMT. US West Texas Intermediate crude gained 49 cents, or 0.7 percent, to $71.48 per barrel. On an annual basis, Brent fell by 3.2%, while WTI fell by 0.6%.

China’s manufacturing activity grew for a third straight month in December but at a slower pace, an official factory survey showed on Tuesday, suggesting a raft of new stimulus is helping to support the world’s second-largest economy.

Reuters reported last week that Chinese authorities also agreed to issue a record 3 trillion yuan ($411 billion) worth of special treasury bonds in 2025 to revive economic growth.

While the weak long-term demand outlook weighed on prices, they may find support in the short term from falling inventories, which are expected to have fallen by about 3 million barrels last week.

Brent crude and West Texas Intermediate crude received support from a larger-than-expected decline in US crude inventories in the week ending December 20, as refineries intensified their activity and the holiday season supported fuel demand. (Environmental Impact Assessment/Environmental Assessment)