Oil prices rose slightly due to instability in the Middle East and China’s stimulus plans. Brent futures reached $71.24 per barrel while U.S. West Texas Intermediate crude was at $67.72. Despite these gains, global growth concerns and U.S. tariffs are likely to curtail price increases in the future.
Oil prices experienced a slight increase due to ongoing instability in the Middle East and China’s economic stimulus initiatives. As of 0350 GMT on Tuesday, Brent futures rose by 17 cents, reaching $71.24 per barrel, while U.S. West Texas Intermediate crude increased by 14 cents to $67.72 per barrel. ING analysts noted that U.S. military actions against Yemen’s Houthis, along with favorable economic indicators from China, are contributing to market support.
China’s recent unveiling of a special action plan to enhance domestic consumption includes strategies to increase incomes and provide childcare subsidies. Positive economic data showed that retail sales growth accelerated in January and February, although concerns lingered as factory output declined and unemployment reached a two-year peak. Additionally, China reported a 2.1% increase in crude oil throughput, aided by a new refinery and seasonal travel.
Support for oil prices was also bolstered by President Donald Trump’s commitment to intensify actions against Yemen’s Houthis unless they cease attacks on maritime vessels. In the broader context, Israeli air strikes in Gaza have escalated tensions with reports of significant casualties, further compounding the regional instability.
Nevertheless, negative predictions surrounding demand persist. The OECD indicated that U.S. tariffs could severely impede growth across North America, thereby impacting global energy demand. Robert Rennie from Westpac commented that rising global supply, compounded by ongoing trade tensions, may ultimately lead oil prices to decline into the mid $60s.
Moreover, Venezuela’s state-owned PDVSA reportedly has plans to maintain oil production and exports in collaboration with Chevron, despite the impending expiration of their U.S. license. Additionally, discussions between President Trump and President Putin regarding a potential resolution to the Ukraine conflict are also influencing market perceptions, with speculation about sanctions easing and increased crude supply from Russia.
In summary, oil prices experienced a marginal rise due to geopolitical instability in the Middle East and stimulus measures in China. Despite positive data from China, concerns about global growth, particularly influenced by U.S. tariffs, are likely to weigh on demand and prices in the future. Ongoing geopolitical tensions and plans from Venezuela to sustain oil production are further complicating market dynamics.
Original Source: shafaq.com
