Oil prices rose on Tuesday due to tensions in the Middle East and China’s economic initiatives, despite concerns regarding global growth. Brent crude increased by 36 cents to $71.43 per barrel, while U.S. West Texas Intermediate rose by 32 cents to $67.90. U.S. airstrikes and threats against Houthi positions, along with China’s plans to stimulate consumption, were key factors influencing this trend.
On Tuesday, oil prices experienced an increase, driven primarily by escalating tensions in the Middle East and China’s initiatives to bolster its economy. Despite uncertainties surrounding global growth, U.S. tariffs, and ongoing ceasefire discussions in Ukraine constraining the gains, both Brent crude and U.S. West Texas Intermediate crude futures rose by 0.5%, reaching $71.43 and $67.90 per barrel respectively.
Analysts from ING attribute this rise partly to recent U.S. airstrikes on Houthi positions in Yemen, alongside China’s newly announced action plan aimed at stimulating domestic consumption through income increases and childcare subsidies. Additionally, economic indicators showed unexpectedly robust retail sales growth for January and February, even with a slight downturn in industrial production and a rising urban unemployment rate at its highest in two years.
In China, the world’s largest importer of oil, refinery consumption increased by 2.1% year-on-year during the first two months of the year, aided by a new refinery and heightened demand during the Lunar New Year festivities. U.S. President Donald Trump’s threats to escalate strikes against the Houthis if attacks on ships in the Red Sea do not cease further bolstered oil prices, as he declared intentions to hold Iran accountable for future assaults.
In the context of the Israeli-Palestinian conflict, recent Israeli airstrikes on Gaza have reportedly caused over 200 fatalities, as per the Palestinian Ministry of Health, disrupting a relative calm that followed the prior January ceasefire. The OECD warned that the tariffs imposed by the Trump administration could negatively impact economic growth in North America, potentially diminishing global energy demand.
Furthermore, Venezuelan oil company PDVSA signaled its intention to maintain oil production and exports through its collaboration with Chevron, even after the upcoming expiration of the U.S. license. The market gears up for potential discussions between President Trump and Russian President Vladimir Putin, concerning a resolution to the Ukraine conflict, which could result in eased sanctions against Russia and a return of its oil supplies to the global market, potentially driving prices down further.
In conclusion, the recent rise in oil prices is attributed to various geopolitical factors, including Middle Eastern tensions and economic strategies in China. Increased demand from China, U.S. military actions, and ongoing conflicts are significant contributors. The future of oil prices may also hinge on international dialogues surrounding the Ukraine crisis and changes in trade tariffs affecting North American economies.
Original Source: www.jordannews.jo
