Brent moves higher following US and Chinese economic data
The front-month ICE Brent contract has gained $0.32/bbl on the day from Friday, to trade at $76.17/bbl at 09.00 GMT.
PHOTO: Oil barrels with stacks of US dollars. Getty Images
Upward pressure:
Brent futures found a strong start to the week, after manufacturing activity in the US and China showed signs of improvement in December.
China's Manufacturing Purchasing Managers' Index (PMI) reading recorded a 50.1% growth in December. In the US, manufacturing PMI increased to 49.3% in December.
A PMI reading above 50 typically indicates good economic health and an expansion in the manufacturing sector, as well as strong demand for commodities like oil.
“As 2025 begins, oil prices are climbing, fueled by robust demand optimism,” SPI Asset Management’s managing partner Stephen Innes noted.
Downward pressure:
Brent’s price felt some downward pressure from a relatively stronger US dollar ahead of other important economic data from the US Federal Reserve (Fed) later in the week.
Minutes from the US central bank’s last meeting will be out on Wednesday.
A stronger US dollar makes commodities like oil costlier for non-dollar holders, thereby denting demand in the market.
Concerns about potential oil sanctions on Iran under Donald Trump's presidency have bolstered market expectations of a supply increase from OPEC+. Analysts suggest that, in such a scenario, Brent's price could fall.
“There will also be concerns over how hawkish Trump will be towards Iran when he takes office later this month,” two analysts from ING Bank said. “It would also leave an opportunity for OPEC+ to increase supply,” they added.
By Aparupa Mazumder
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