Chinese Economic Data: China's manufacturing activity showed a third month-straight expansion from data released this morning. The purchasing managers index (PMI) was 50.1 in December. The index value 50 is the value that separates growth from contraction.

Supply and Demand: Weak demand from China and rising global supplies of crude oil are likely to keep crude oil prices contained around $70/bbl in 2025 according to Reuters. A survey of 31 economists shows another revision to price expectations lower for the year - the 8th straight month of reduction. Inventories are expected to remain healthy due to non-OPEC member production during 2025. 

Sinochem Import Quota: The Chinese government issues a crude import quota to Sinochem equaling 342k bpd. The quota is expected to hit the group's eastern refineries and could indicate that 3 of the bankrupted refineries may resume operations. Total import quotas to China for 2025 have equated to 3.57 million bpd. China is the world's largest crude importer and second largest consumer. 

Market Overview: Markets are relatively muted this morning as the calendar year 2024 comes to a close. In review of the year, crude oil appears to be on track for its second-in-a-row annual loss with Brent and WTI down 4% and 1% respectively from the end of 2023. Current headlines seem to already be priced in, as neither economic indicator nor production data appears to be moving markets this morning. 

RBOB contract appears to be finding some support this morning around the $1.96 leve lthis morning as the year closes out. The value is well under the annual high that hit $2.85 back in April as the summer gas season started. Values on January 1st, 2024, opened up at $2.10.

Energy futures popped slightly higher during the last trading session of the year. The U.S. conducted air strikes in Yemen against Houthi rebels in Sanaa and other locations in the country. The group has been threatening shipping lanes in Red Sea since the war between Israel and Hamas started last year. Uncertainty in the region has added a premium to energy prices. Weaker demand outlook in China has been weighing on forecasts into 2025, but recent stimulus actions taken by the Chinese government provide hopes of boosting the second largest economy in the world during 2025 - fueling energy demand. Additional optimism, which has been tempered in recent weeks, comes from the Federal Reserve's fight against inflation. Investors are watching interest rate outlook in 2025 as stubbornly high inflation might be a longer road ahead to come to heel. Fewer interest rate cuts will continue to cause higher costs of borrowing and weigh on energy demand. Additional uncertainty about a second Trump administration, and proposed tariffs and geopolitical agendas, have given markets some uncertainty with the move forward into the next four years.