At 08:45 GMT, Light Crude Oil Futures are trading $68.06, up $0.69 or +1.02%.
Geopolitical Risks and China’s Stimulus Bolster Oil Prices
Oil prices are finding support from escalating geopolitical tensions in the Middle East and fresh stimulus measures in China. U.S. strikes on Yemen’s Houthis, along with renewed conflict between Israel and Palestine, are fueling concerns over potential disruptions in global crude supply. In Gaza, Israeli air strikes killed at least 200 people, ending a temporary ceasefire that had been in place since January.
Meanwhile, China’s government unveiled a new action plan to stimulate domestic consumption, including income-boosting measures and childcare subsidies. Official data showed that retail sales growth exceeded expectations in January-February, while crude oil throughput in China—the world’s largest crude importer—rose 2.1% year-over-year. However, weaker factory output and a rising unemployment rate tempered optimism.
U.S. Tariffs and Global Supply Growth Pose Downside Risks
Despite geopolitical and economic support, oil prices face headwinds from global supply concerns and trade uncertainty. The Organization for Economic Cooperation and Development (OECD) warned that tariffs imposed by the U.S. on key trading partners could drag down growth in North America, ultimately weighing on global energy demand.
Venezuela’s PDVSA is also preparing for continued oil production and exports through its joint venture with Chevron, even as the U.S. major’s license is set to expire next month. If Venezuelan crude continues to flow into global markets, it could further contribute to oversupply.
Ukraine Ceasefire Talks and Market Sentiment
Oil traders are closely watching ongoing discussions between U.S. and Russian leaders over the Ukraine conflict. Any peace negotiations could lead to the easing of sanctions on Russia, potentially bringing more crude supply back to global markets, which would put downward pressure on prices.