Oil prices rose slightly on Tuesday, supported by instability in the Middle East and China’s stimulus plans. Despite global growth concerns and US tariffs, oil futures ticked up 17 cents to $71.24 a barrel for Brent and 14 cents to $67.72 a barrel for West Texas Intermediate crude.
China’s state council unveiled a special action plan to boost domestic consumption, including measures to boost incomes and offer childcare subsidies. This move, combined with stronger-than-expected Chinese retail sales and fixed asset investment growth, provided support to the market.
The Middle East instability, which includes US strikes on Yemen’s Houthis, also contributed to the rise in oil prices. Additionally, President Trump’s vow to continue the US assault on Yemen unless the Houthis end their attacks on ships in the Red Sea added to the sentiment.
However, concerns about global demand were highlighted by the OECD, citing Trump’s tariffs as a downside risk for oil. The organization warned that the tariffs would drag down growth in the United States, Canada, and Mexico, weighing on global energy demand.
Venezuela also announced plans to continue producing and exporting oil from its joint venture with Chevron after the US major’s licence expires next month. Talks between Trump and Russian President Vladimir Putin about ending the Ukraine war are also ongoing, which could potentially lead to the easing of sanctions on Russia and the return of its crude supply to global markets.
Despite these factors, analysts remain cautious, citing concerns about global demand and the potential for oil prices to head lower in the mid-$60s.
Source: https://www.reuters.com/business/energy/oil-prices-muted-slowdown-worries-offset-china-data-mideast-risks-2025-03-18