Oil prices rose slightly due to Middle Eastern instability and China’s stimulus efforts, despite global growth and tariff concerns. Brent crude futures climbed to $71.24 per barrel, while U.S. prices reached $67.72. Key factors include U.S. actions in Yemen, positive Chinese economic data, and potential impacts from ongoing geopolitical discussions.

On Tuesday, oil prices experienced a slight increase, influenced by instability in the Middle East and new stimulus initiatives by China, despite concerns regarding global economic growth, U.S. tariffs, and the ongoing ceasefire discussions between Russia and Ukraine. Brent crude futures rose by 17 cents to $71.24 per barrel, while U.S. West Texas Intermediate crude futures increased by 14 cents to $67.72 per barrel.

According to analysts at ING, several factors contributed to market support, including U.S. military actions against the Houthis in Yemen. Additionally, China announced plans to enhance domestic consumption, and recent data showed an unexpected rise in retail sales and fixed asset investments.

China’s state council introduced a special action plan on Sunday aimed at stimulating domestic consumption through income boosts and childcare subsidies. Furthermore, economic data released on Monday indicated a quicker increase in retail sales during January and February, although industrial output plummeted and the urban unemployment rate reached a two-year high.

China, as the world’s largest crude importer, reported a 2.1% surge in crude oil throughput during January and February, attributed to new refinery operations and holiday travel. Supporting market prices, President Donald Trump reiterated his commitment to continue U.S. military actions against Yemen’s Houthis unless they cease their maritime attacks.

Amid the ongoing Israel-Palestinian conflict, air strikes in Gaza reportedly resulted in at least 200 fatalities, as the situation escalated after a temporary ceasefire had previously halted hostilities. The OECD cautioned that Trump’s tariffs could negatively impact economic growth in the U.S., Canada, and Mexico, thereby limiting global energy demand.

Robert Rennie, head of commodity and carbon strategy at Westpac, expressed doubts about oil prices, stating that elevated global supply and potential trade conflicts could lead to prices declining to the mid-$60s range. Additionally, updates from Venezuela indicated plans by its state-run PDVSA to maintain oil production and export operations with Chevron, even as U.S. licenses approach expiration. Finally, the upcoming discussions between President Trump and President Putin regarding the Ukraine conflict may also influence market dynamics, particularly if a peace agreement leads to eased sanctions on Russia, potentially flooding the market with its crude oil.

In summary, oil prices have slightly increased due to geopolitical instability and China’s economic stimulus, although overarching concerns regarding global growth and tariffs persist. Analysts predict a potential decline in prices as market dynamics evolve, particularly in response to ongoing conflicts and trade issues. The situation remains fluid, as geopolitical negotiations may further impact global oil supply and demand.

Original Source: shafaq.com

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