Oil recovers as upbeat Chinese manufacturing data increases some optimism
Business
Brent crude climbed 76 cents, or 1%, to $73.57 a barrel
SINGAPORE (Reuters) - Oil prices rose 1% on Monday as upbeat manufacturing data from China, the world's biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about global economic growth from potential U.S. tariffs loomed.
Brent crude climbed 76 cents, or 1%, to $73.57 a barrel by 0206 GMT while U.S. West Texas Intermediate crude was at $70.51 a barrel, up 75 cents, or 1.1%.
Prices gained after official data on Saturday that showed that China's manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchase volumes led to a solid rise in production. Investors are eyeing China's annual parliamentary meeting from March 5 for further measures to support its battered economy.
IG market analyst Tony Sycamore said one of the possible drivers for rising prices was "the China NBS manufacturing PMI moved back into expansionary territory over the weekend."
However, he cautioned the country's economic outlook may not be inspiring with another round of tariffs on exports to the U.S. set to start on March 4.
Analysts from Goldman Sachs were somewhat more positive about the data, saying in a note it suggests stable to slightly better economic activity in China in early 2025, although the imposition of the extra 10% U.S. tariff may prompt retaliatory measures.
Last month, Brent and WTI posted their first monthly decline in three months as the threat of tariffs from the U.S. and its trade partners shook investors' confidence in global economic growth this year and reduced their appetite for riskier assets.
Overall sentiment improved following a summit on Sunday where European leaders offered a strong show of support for Ukrainian President Volodymyr Zelenskiy and promised to do more to help his nation, just two days after he clashed with U.S. President Donald Trump and cut short a visit to Washington.
Zelenskiy said on Sunday he believed he could salvage his relationship with Trump but that talks needed to continue behind closed doors. He added that he remained ready to sign a minerals deal with the United States, and he believed the U.S. would be ready as well.
Ongoing attacks at Russian refineries have raised concerns about its refined products exports with another plant in the Russian city of Ufa reportedly on fire.
For 2025, analysts are holding their oil price forecasts largely steady, with Brent averaging at $74.63 a barrel, as they expect any impact from further U.S. sanctions to be balanced by ample supply and a possible peace deal between Russia and Ukraine, a Reuters poll showed.
While the U.S. is urging Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil firms operating there said on Friday they would not restart shipments through Turkey's port of Ceyhan due to a lack of clarity on commercial agreements and guarantees of payment for past and future exports.
