Oil Prices Surge Amid China’s Positive Manufacturing Data

Oil Prices Rise Amid Optimism for Fuel Demand

On Monday, oil prices experienced a one percent increase, buoyed by renewed optimism surrounding fuel demand following encouraging manufacturing data from China, the world’s largest importer of crude. This uptick comes against a backdrop of uncertainty regarding global economic growth, particularly in light of potential new U.S. tariffs.

As of 02:06 GMT, Brent crude oil prices gained 76 cents, reaching $73.57 per barrel, while West Texas Intermediate (WTI) crude rose by 75 cents, or 1.1 percent, to settle at $70.51 per barrel.

This price increase aligns with the release of official data indicating that manufacturing activity in China expanded at its fastest pace in three months during February. The growth in activity was driven by a surge in new orders and increased purchasing volumes, which contributed to a notable rise in production levels.

Investors are currently anticipating an annual meeting of the Chinese parliament scheduled for March 5, where further measures to stimulate the nation’s struggling economy may be discussed.

According to analysts, “A key driver for elevated oil prices has been the recent return of the Chinese Industrial Procurement Manager Index, which has indicated expansion over the weekend.” However, analysts caution that the country’s economic outlook may face challenges, particularly with the proposed new tariffs on exports to the U.S., set to take effect on March 4.

Goldman Sachs analysts expressed a more optimistic perspective in recent communications, suggesting that the data indicates stable or slightly improved economic activity in China heading into early 2025. Nonetheless, they acknowledge that the introduction of additional 10% tariffs by the U.S. could provoke retaliatory responses.

Last month, both Brent and WTI crude recorded their first monthly declines in three months, as concerns over the prospect of U.S. tariffs dampened investor confidence in global economic growth for the year, subsequently decreasing their appetite for higher-risk assets.

This latest movement in oil prices underscores the delicate balance between emerging economic indicators and the geopolitical climate that influences market sentiment. As the situation evolves, stakeholders will be closely monitoring both Chinese economic policies and U.S. trade actions.