Economy Update – Baghdad
Oil prices experienced a one percent increase on Monday, driven by renewed optimism regarding fuel demand. This optimism stems from positive manufacturing data emerging from China, the world’s largest crude importer, despite ongoing uncertainty about global economic growth due to potential U.S. tariffs.
As of 02:06 GMT, Brent crude rose by 76 cents, or one percent, to $73.57 per barrel, while West Texas Intermediate crude advanced by 75 cents, or 1.1 percent, reaching $70.51 per barrel.
The uptick in prices followed the release of official data on Saturday, indicating that manufacturing activity in China accelerated to its fastest pace in three months in February. This growth was bolstered by a strong rise in new orders and increased purchasing volumes.
Investors are now closely monitoring the upcoming annual meeting of the Chinese parliament, scheduled for March 5, which is anticipated to result in further measures aimed at supporting the struggling economy.
“A key driver behind the potential price increase is the recent rebound in the Chinese Industrial Procurement Manager Index, which entered the expansion zone over the weekend,” noted market analysts.
However, experts caution that the economic outlook for China remains uncertain due to an impending round of tariffs on exports to the United States, set to commence on March 4.
Analysts at Goldman Sachs expressed a more favorable view of the latest data, suggesting it points to stable or slightly improved economic activity in China at the beginning of 2025. Nonetheless, they warned that a 10% increase in U.S. tariffs could provoke retaliatory actions.
In the previous month, both Brent and West Texas Intermediate crude recorded their first monthly decline in three months. This downturn was largely attributed to heightened concerns surrounding U.S. tariffs and trade relations, which have undermined investor confidence in global economic growth for the year and diminished their appetite for riskier assets.
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