Oil prices rose slightly on Tuesday, influenced by instability in the Middle East and China’s economic stimulus measures. Brent futures reached $71.24 a barrel while West Texas Intermediate crude rose to $67.72. Global demand concerns and U.S. tariffs could hamper further price increases despite recent gains from geopolitical factors and positive Chinese data.
On Tuesday, oil prices experienced a slight increase due to geopolitical instability in the Middle East, boosted by China’s recent stimulus plans and economic data. Brent futures rose by 17 cents, reaching $71.24 per barrel, while U.S. West Texas Intermediate crude futures increased by 14 cents to $67.72 per barrel.
According to analysts from ING, various factors contributed to the market’s support, including U.S. military actions against Houthis in Yemen and China’s strategies to stimulate consumption. The introduction of measures to enhance domestic spending, such as increased income and childcare subsidies, indicates a robust approach to reviving the economy.
Positive Chinese economic data has also contributed to this optimism. Retail sales and fixed asset investment growth exceeded expectations. Crude oil throughput in China rose by 2.1% year-on-year during January and February, driven by new refinery operations and increased holiday-related travel.
President Donald Trump’s commitment to ongoing military efforts against the Houthis unless they cease maritime attacks further supported oil prices. However, the Israel-Palestinian conflict remains a concern, with recent airstrikes by Israel resulting in significant casualties in Gaza.
Despite the upward pressure on oil prices, lingering worries regarding demand persist. The OECD has cautioned that U.S. tariffs could undermine economic growth in North America, ultimately impacting global energy requirements. Robert Rennie of Westpac remarked that due to surging global supply and trade wars, oil prices could eventually settle in the mid $60s.
In addition, Venezuela’s PDVSA is poised to maintain production and export activities with Chevron even after the expiration of its U.S. license, potentially increasing supply. Discourse surrounding U.S.-Russia relations and the possibility of negotiations to conclude the Ukraine conflict adds another layer of uncertainty to oil prices.
In summary, oil prices have risen slightly owing to Middle Eastern instability and positive economic indicators from China, despite persistent global demand concerns and U.S. trade policies. While local events are creating upward pressure, factors including international negotiations and supply forecasts may offset these gains in the future. Continued observation of geopolitics and trade dynamics will be essential in understanding the trajectory of oil prices moving forward.
Original Source: ina.iq
