Oil prices rose on Monday, supported by upbeat factory activity in China, the world's second-largest oil consumer, and as Israel pressed ahead with its offensive against Lebanon despite a ceasefire pact, stoking tensions in the Middle East.

Brent crude futures rose 34 cents, or 0.47%, to $72.18 a barrel by 0452 GMT while U.S. West Texas Intermediate crude was at $68.32 a barrel, up 32 cents, or 0.47%.

"Oil prices have managed to stabilize into the new week, with continued expansion in Chinese manufacturing activity reflecting some degree of policy success from recent stimulus efforts," said Yeap Jun Rong, market strategist at IG.

This provides some relief that Chinese oil demand may be holding up for now, he added.

A private sector survey showed China's factory activity expanded at the fastest pace in five months in November, boosting optimism among Chinese companies just as U.S. President-elect Donald Trump ratcheted up his trade threats.

Traders, however, are watching developments in Syria, considering whether they could widen tensions in the Middle East, Yeap added.

A ceasefire between Israel and Lebanon came into effect on Wednesday, but each side has accused the other of violating the truce.

Lebanon's health ministry said in a statement that several people were wounded in two Israeli strikes in southern Lebanon. Airstrikes have also intensified in Syria, as President Bashar al-Assad vowed to crush rebels who have overrun the city of Aleppo.

Both benchmarks fell more than 3% last week, as concerns eased over supply risks from the Israel-Hezbollah conflict and expectations of a glut in 2025, even as OPEC+ is expected to extend output cuts. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, postponed its meeting until Dec. 5 and are discussing delaying an increase in oil output that was due to start in January, OPEC+ sources told Reuters last week.

This week's meeting will decide policy for the early months of 2025.

"An extension of the production cuts will give OPEC+ more time to assess the impact of Trump's tariff and energy policy announcements and also to see what China's response will be," said Tony Sycamore, a Sydney-based market analyst at IG.

With the group's output hike widely expected, market focus may be on how much the delay could affect crude prices, said IG's Yeap.

"An indefinite delay is probably the best case for oil prices, given that previous rounds of delays of about a month have failed to drive oil prices higher in the way OPEC+ would like."

Brent is expected to average $74.53 a barrel in 2025 as economic weakness in China crimps demand and a global supply glut outweighs support from a delay in OPEC+'s planned output increase, a monthly Reuters oil price poll showed on Friday.

It was the seventh straight downward revision to the 2025 consensus for the global benchmark, which has so far averaged $80 a barrel in 2024.

Source: Investing.com