Oil Prices Rise Amid Positive Chinese Manufacturing Data
Global oil prices experienced an uptick in trading today, buoyed by optimistic data from China's manufacturing sector, which is a significant indicator of demand for oil. Brent crude futures increased by 57 cents, or 0.79%, reaching $71.41 a barrel, while US West Texas Intermediate crude rose by 58 cents, or 0.85%, to $68.58 a barrel. Analysts, including IG market expert Yip Jun Rong, noted that the expansion in manufacturing activity reflects the effectiveness of recent stimulus measures in China, the world's second-largest oil consumer. This development has provided reassurance regarding continued demand for oil from China, despite rising geopolitical tensions in the Middle East, particularly between Israel and Hezbollah.
The ongoing conflict has raised concerns about potential supply disruptions, especially as Israel resumes attacks on Lebanon despite a ceasefire agreement. The truce, which began last Wednesday, has been marred by mutual accusations of violations, further complicating the situation. Last week, oil benchmarks fell over 3% as initial fears of supply disruptions eased, with expectations that OPEC+ would extend production cuts. OPEC+, which includes OPEC members and allies like Russia, is set to meet on December 5 to discuss output policies, including the potential delay of a planned production increase in January.
Gold Prices Decline Under Dollar Pressure
In contrast to rising oil prices, gold has seen a decline, with spot gold prices falling by 0.88% to $2,630.40 an ounce. This drop is attributed to a stronger dollar and profit-taking after a four-session rally. Investors are currently awaiting key U.S. economic data that could influence the Federal Reserve's monetary policy, including the jobs report and remarks from several Fed officials, including Chairman Jerome Powell. The market anticipates a 67.1% chance of a 25 basis point rate cut in December, which could further impact gold prices negatively.
The dollar's strength has been bolstered by President-elect Donald Trump's recent demands for BRICS countries to guarantee that they will not replace the dollar in global trade, threatening 100% tariffs on those that do. This political climate, combined with uncertainty in Europe, particularly in France, has contributed to fluctuations in currency values. The euro has weakened against the dollar, which rose to 106.170 points, reflecting a 1.8% gain in November despite a slight setback last week. As the market navigates these developments, the interplay between oil and gold prices continues to be closely monitored.
