Oil Rises Again! Positive Chinese Sentiment, But US Tariffs Loom
Global oil prices rose on Monday, driven by solid Chinese economic data and market anticipation of the latest US action in the Ukraine conflict. Brent oil traded above $71 per barrel, extending its 3% rally from last week, while West Texas Intermediate (WTI) also showed modest gains.
China recorded its highest trade surplus in history, indicating that factories are able to withstand the shock of global tariffs. The data also showed a surge in crude oil imports, including from Iran. Analysts viewed this data as a sign that Chinese energy demand remains strong, supporting market sentiment.
On the geopolitical front, US President Donald Trump is scheduled to make a "significant statement" regarding the Ukraine war. He has also promised to send more weapons to Kyiv. The market is now waiting to see whether the US will renew or expand sanctions on Russia—a move that could trigger potential disruptions to global oil supplies.
However, bullish sentiment was tempered by Trump's renewed threat of 30% tariffs on the EU and Mexico, which raised concerns about global energy demand. Protectionist rhetoric could slow economic growth and ultimately depress oil consumption.
So far this year, oil prices have fallen nearly 5%, reflecting the trade-off between supply concerns from the Middle East and weakening global demand due to the trade war. Furthermore, the easing of OPEC+ production quotas risks creating a supply glut in the second half of the year.
Source: (alg-Newsmaker)
