Oil prices increased slightly, influenced by instability in the Middle East and China’s economic stimulus plans. Brent futures reached $71.24, while WTI saw $67.72. However, concerns about global demand due to U.S. tariffs and growth projections limit price increases. Positive consumption data from China added to market support.
On Tuesday, oil prices experienced a slight increase, influenced primarily by geopolitical instability in the Middle East and economic stimulus initiatives in China. Brent futures rose by 17 cents, totaling $71.24 per barrel, while U.S. West Texas Intermediate crude saw an uptick of 14 cents, reaching $67.72 per barrel. Analysts at ING noted that U.S. military actions against the Houthis in Yemen, combined with positive developments in China, supported market conditions.
China’s efforts to invigorate domestic consumption, highlighted by a new action plan from the state council, contributed to market gains. This plan includes income-boosting strategies and childcare subsidies. Additionally, recent data indicated stronger-than-anticipated growth in Chinese retail sales and fixed asset investment, despite concerns over falling factory output and rising unemployment rates.
Crude oil throughput in China increased by 2.1% year-on-year during January and February, partially due to holiday travel and contributions from a new refinery. The market also benefited from President Donald Trump’s commitment to continue military actions against Yemen’s Houthis unless they cease their assaults on maritime vessels in the Red Sea.
However, ongoing concerns regarding demand pose risks to oil prices. The OECD warned that U.S. tariffs could negatively impact economic growth in North America, consequently diminishing global energy demand. Robert Rennie from Westpac noted that, due to rising global supply and economic tariffs, oil prices are likely to decline, potentially settling in the mid-$60 range.
Additionally, Venezuelan state-run PDVSA has indicated intentions to maintain oil production and exports through its joint venture with Chevron, even after U.S. licensing issues arise next month. The negotiations between President Trump and President Putin regarding the resolution of the Ukraine conflict have also garnered attention, with markets speculating that any peace agreement might facilitate the return of Russian crude to global markets, further impacting prices.
In summary, oil prices are rising slightly due to Middle Eastern geopolitical tensions and China’s stimulus measures. However, concerns about global demand, particularly related to U.S. tariffs and economic growth projections, may restrict further price increases. Additionally, developments in Venezuela’s oil production and the potential outcome of U.S.-Russia negotiations could significantly influence future oil market dynamics.
Original Source: ina.iq
