Oil Prices Slip Amid Quiet Trade as Markets Eye Key China and U.S. Economic Data

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Oil prices edged slightly lower on Monday, reflecting thin trading volumes during the holiday season. Traders remain cautious, awaiting critical economic data from China and the United States—the two largest oil consumers globally—to gauge potential growth trajectories in 2025.

Brent crude futures dipped marginally by 8 cents to $74.09 per barrel by 0700 GMT, while the more actively traded March contract saw a 6-cent decline to $73.73 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude slipped by 5 cents to settle at $70.55 per barrel.

Despite these minor declines, oil prices gained some momentum last week, with both contracts climbing around 1.4%. This increase was driven by a larger-than-expected drawdown in U.S. crude inventories for the week ending December 20, as refiners ramped up production to meet heightened fuel demand during the holiday season.

Optimism surrounding China’s economic growth in the coming year has also lent support to oil markets. As the world’s top crude oil importer, China’s economic recovery is a key factor influencing global energy demand.

To stimulate growth, Chinese authorities recently announced plans to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025, according to reports from Reuters.

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“Global oil consumption hit an all-time high in 2024, despite China falling short of economic expectations,” noted Ryan Fitzmaurice, senior commodity strategist at Marex. “Heading into 2025, oil stockpiles are relatively low, and China’s recent stimulus measures are expected to drive improved economic data.”

China has already issued crude oil import quotas totaling at least 152.49 million metric tons to independent refiners in a second allocation for 2025.

The World Bank has recently revised its economic growth forecasts for China for both 2024 and 2025. However, the organization cautioned that structural headwinds could continue to weigh on the country’s recovery.

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Investors will closely watch China’s upcoming Purchasing Managers’ Index (PMI) factory surveys, scheduled for release on Tuesday, to glean further insights into the health of its industrial sector.

On the U.S. side, the market eagerly anticipates the Institute for Supply Management (ISM) survey for December, set to be released on Friday. The U.S. Federal Reserve’s recent shift toward lower interest rates is expected to support oil consumption by easing economic pressures and encouraging industrial activity.

Globally, oil markets have benefited from robust consumption trends, even as geopolitical and economic uncertainties persist. Analysts highlight that 2024 saw record-high global oil consumption, signaling resilient demand despite fluctuating economic conditions.

Meanwhile, in Europe, energy challenges persist. Hopes for a new agreement to transit Russian gas through Ukraine appear dim after Russian President Vladimir Putin indicated last week that there was insufficient time left this year to finalize a deal.

The potential loss of piped Russian gas may compel Europe to increase its imports of liquefied natural gas (LNG), adding another layer of complexity to the global energy landscape.


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