Oil prices rose slightly on Tuesday, buoyed by instability in the Middle East and China’s economic stimulus plans. Brent crude reached $71.24, and WTI crude climbed to $67.72. Analysts note ongoing global growth concerns and geopolitical developments could temper further gains.
On Tuesday, oil prices experienced a slight increase attributed to Middle Eastern instability and China’s economic stimulus efforts, despite ongoing global growth concerns and geopolitical developments. Brent crude futures rose by 17 cents to $71.24 per barrel, while U.S. West Texas Intermediate crude increased by 14 cents to $67.72 per barrel.
According to analysts from ING, market support stemmed from U.S. military actions against Yemeni Houthis and a significant action plan unveiled by China to enhance domestic consumption, including income boosting and childcare subsidies. Positive data on retail sales and fixed asset investments in China indicated stronger-than-anticipated economic performance.
Despite these positive indicators, challenges persist as factory output declined, and urban unemployment reached a two-year high. Additionally, crude oil throughput in China rose by 2.1% in the first two months of the year, influenced by a rise in refinery activity.
Geopolitical developments added pressure, notably U.S. President Trump’s commitment to ongoing military action in Yemen unless Houthi attacks cease. The conflict in Gaza further heightened concerns, with recent Israeli airstrikes resulting in significant casualties.
However, the OECD warned that Trump’s tariffs would curtail growth in North America, subsequently pressuring global energy demand. Analysts suggest that prices are likely to decline amid increasing supply and heightened concerns regarding trade wars. Robert Rennie of Westpac predicts that oil prices may ultimately settle in the mid-$60 range.
Further, oil supply from Venezuela remains a focal point, as PDVSA plans to continue production in collaboration with Chevron even post-expiration of the U.S. company’s license next month. Additionally, discussions between President Trump and President Putin regarding the Ukraine conflict could influence global crude markets, as potential easing of sanctions on Russia is anticipated.
In summary, oil prices showed a minor increase due to geopolitical instability and economic stimuli in China, while concerns over global demand and U.S. tariffs present significant challenges. Market analysts remain cautious, foreseeing potential declines in oil prices amid increasing supply and fluctuating geopolitical factors. Overall, the oil market reflects a complex interplay of both supportive and obstructive elements.
Original Source: shafaq.com
