Oil Prices Rise Amid Global Tensions Despite Economic Concerns
Oil prices increased due to Middle Eastern tensions and China’s economic plans, despite concerns over global growth and tariffs. Brent crude reached $71.43, while U.S. West Texas Intermediate rose to $67.90. Key contributors included U.S. airstrikes in Yemen and China’s efforts to stimulate consumption.
On Tuesday, oil prices experienced an increase due to ongoing tensions in the Middle East and China’s intentions to enhance its economic situation. Despite fears surrounding global economic performance, U.S. tariffs, and uncertainty regarding ceasefire negotiations in Ukraine, these factors limited overall gains in oil prices.
As of 07:00 GMT, Brent crude futures gained 36 cents (0.5%), reaching $71.43 per barrel, while U.S. West Texas Intermediate crude futures climbed by 32 cents (0.5%) to $67.90. Analysts from ING noted that U.S. airstrikes against Houthi positions in Yemen and China’s new economic stimulation plan contributed to this upward movement in prices.
The Chinese government unveiled a plan aimed at bolstering domestic consumption, which includes measures such as increasing incomes and childcare subsidies. Additionally, recent economic indicators revealed stronger-than-anticipated retail sales during January and February, despite downturns in industrial production and a rise in urban unemployment to a two-year high.
China, as the largest oil importer, saw a 2.1% increase in refinery consumption for January and February compared to the previous year, aided by the activation of a new refinery and heightened demand during the Lunar New Year holiday.
Further price support stems from U.S. President Donald Trump’s threats to continue military actions against the Houthis in Yemen should they persist in attacking ships in the Red Sea, holding Iran accountable for any renewed assaults.
In relation to the Israeli-Palestinian conflict, Israeli airstrikes on Gaza led to over 200 fatalities, as reported by the Palestinian Ministry of Health, ending a period of relative calm following the January ceasefire.
The Organization for Economic Cooperation and Development (OECD) cautioned that Trump’s tariffs may adversely impact growth in the U.S., Canada, and Mexico, potentially leading to a contraction in global energy demand.
Moreover, Venezuelan oil company PDVSA intends to maintain its oil production and exportation in collaboration with Chevron despite the imminent expiration of the U.S. license next month. The market now awaits discussions between Trump and Russian President Vladimir Putin regarding the Ukraine war, with expectations that a potential peace agreement could ease sanctions on Russia, subsequently allowing its oil back into global markets potentially lowering prices.
In conclusion, oil prices are rising as geopolitical tensions persist, particularly in the Middle East and as China pushes for economic growth. Factors such as the U.S. military actions, OPEC dynamics, and fluctuating economic indicators will continue to shape the oil market landscape. The ramifications of tariffs and international negotiations will also likely play a significant role in future price adjustments.
Original Source: www.jordannews.jo
