Oil prices rose amid instability in the Middle East and China’s plans

Oil prices rose slightly on Tuesday, boosted by instability in the Middle East, as well as stimulus plans and data from China, although concerns about global growth, US tariffs and ceasefire talks between Russia and Ukraine curbed growth, UNN writes with reference to Reuters.

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Brent crude futures rose 17 cents, or 0.2%, to $71.24 a barrel by 03:50 GMT, while US West Texas Intermediate crude futures rose 14 cents, or 0.2%, to $67.7.

“Along with US strikes against the Houthis in Yemen, several factors have supported the market,” ING analysts said in a note.

“China has unveiled plans to boost consumption, while growth in retail sales and fixed asset investment in China has been stronger than expected,” the note said.

China’s State Council unveiled a special action plan on Sunday to boost domestic consumption, including measures such as increasing incomes and providing childcare subsidies.

On Monday, Chinese economic data showing that retail sales growth accelerated in January-February also gave investors reason for optimism, although factory output fell and the urban unemployment rate hit a two-year high.

Crude oil throughput in China, the world’s largest crude oil importer, rose 2.1% in January and February compared to last year, boosted by a new refinery and holiday travel, official data showed on Monday.

Prices were also supported by US President Donald Trump’s vow to continue the US offensive against the Yemeni Houthis unless they stop attacking ships in the Red Sea.

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As for the Israeli-Palestinian conflict, Palestinian health officials say at least 200 people have been killed in Israeli air strikes in the Gaza Strip, as attacks on Tuesday ended weeks of confrontation over extending a ceasefire that halted fighting in January.

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Highlighting concerns about demand, a key downside risk to oil prices, the OECD said on Monday that Trump’s tariffs would reduce growth in the United States, Canada and Mexico, putting pressure on global energy demand.

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“With rising global supply and tariffs and trade wars set to hit global demand, we continue to believe prices will go down and eventually reach the mid-$60s,” said Robert Rennie, head of commodities and carbon strategy at Westpac.

In addition to global supply, Venezuela’s state-owned PDVSA has developed three operating scenarios indicating that it plans to continue producing and exporting oil from its joint venture with Chevron after the US major’s license expires next month, according to a company document seen by Reuters on Monday.

Also in focus were talks between Trump and Russian dictator Vladimir Putin on Tuesday to end the war in Ukraine.

Markets believe that potential peace talks would include easing sanctions against Russia and returning its crude oil supplies to global markets, putting pressure on prices.

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