SINGAPORE, Jan 2 (Reuters) - Oil prices nudged higher on

Thursday, the first day of trade for 2025, as investors

returning from holidays cautiously eyed a recovery in China's

economy and fuel demand following a pledge by President Xi

Jinping to promote growth.

Brent crude futures rose 46 cents, or 0.6%, to

$75.10 a barrel by 0128 GMT after settling up 65 cents on

Tuesday, the last trading day for 2024. U.S. West Texas

Intermediate crude futures gained 49 cents, or 0.7%, to

$72.21 a barrel after closing 73 cents higher in the previous

session.

China's Xi said on Tuesday in his New Year's address that

the country would implement more proactive policies to promote

growth in 2025.

In an official survey released on Tuesday, China's

manufacturing activity barely grew in December though services

and construction recovered. The data suggested policy stimulus

is trickling into some sectors as China braces for new trade

risks from tariffs proposed by U.S. President-elect Donald

Trump.

Traders are returning to their desks and probably

weighing higher geopolitical risks and also the impact of Trump

running the U.S. economy red hot versus the impact of tariffs,

IG market analyst Tony Sycamore said.

"Today's China Caixin PMI release and tomorrow's US ISM

manufacturing release will be key to crude oil's next move," he

added.

Sycamore said WTI's weekly chart is winding itself into a

tighter range, which suggests a big move is coming.

"Rather than trying to predict in which way the break will

occur, we would be inclined to wait for the break and then go

with it," he added.

Investors are also awaiting weekly U.S. oil stocks data from

the Energy Information Administration which has been delayed

until Thursday due to the New Year holiday.

U.S. crude oil and distillate stockpiles are expected to

have fallen last week while gasoline inventories likely rose, an

extended Reuters poll showed on Tuesday.

U.S. oil demand surged to the highest levels since the

pandemic in October at 21.01 million barrels per day (bpd), up

about 700,000 bpd from September, EIA data showed on Tuesday.

Crude output from the world's top producer rose to a record

13.46 million bpd in October, up 260,000 bpd from September, the

report showed.

In 2025, oil prices are likely to be constrained near $70 a

barrel, down for a third year after a 3% decline in 2024, as

weak Chinese demand and rising global supplies offset efforts by

OPEC+ to shore up the market, a Reuters monthly poll showed.

In Europe, Russia halted gas exports via Soviet-era

pipelines running through Ukraine on New Year's Day. The widely

expected stoppage will not impact prices for consumers in the

European Union as some buyers have arranged alternative supply,

while Hungary will keep receiving Russian gas via the TurkStream

pipeline under the Black Sea.