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China's stimulus plan, data and oil gains

China's stimulus plan, data and oil gains

The oil price rose on Tuesday due to the Middle East instability, China's stimulus data and plans, and U.S. Tariffs. However, global growth concerns and Russia-Ukraine peace talks, as well as U.S.

Brent futures increased 17 cents or 0.2% to $71.24 per barrel at 0350 GMT. U.S. West Texas Intermediate Crude Futures increased 14 cents or 0.2% to $67.72 per barrel.

In a recent research note, ING analysts stated that "along with U.S. attacks on the Houthis of Yemen, several other factors supported the market."

The Chinese government announced plans to boost consumption and retail sales, while fixed asset investment in China grew faster than expected.

The cabinet or state council is the body that governs.

unveiled

On Sunday, a special plan was announced to boost the domestic consumption. It includes measures like boosting incomes or offering subsidies for childcare.

Investors were encouraged by the Chinese data released on Monday showing that retail sales grew faster in January and February, despite factory output falling and urban unemployment reaching its highest level in two years.

Official data released on Monday showed that the crude oil throughput of China, which is the world's largest crude importer rose by 2.1% between January and February compared to a year ago, thanks in part to a new refinery as well as holiday travel.

Prices were also supported by President Donald Trump’s promise to continue the U.S. attack on Yemen’s Houthis until they stop their attacks on ships on the Red Sea.

Palestinian health officials said that Israeli airstrikes in Gaza have killed at least 200 Palestinians. The attacks, which took place on Tuesday, ended a standoff of several weeks over the extension of a ceasefire, which halted fighting back in January.

The OECD highlighted persistent concerns over demand as a major downside risk for crude oil. It said that Trump's Tariffs would slow down the growth of the United States, Canada, and Mexico. This would have a negative impact on the global energy demand.

Robert Rennie is the head of Westpac's commodity and carbon strategy. He said that despite the global supply surge and the trade wars, the prices are likely to fall and reach the mid-$60s.

According to a document that was reviewed on Monday, Venezuela's PDVSA, the state-run oil company, has developed three scenarios to indicate how it intends to continue to produce and export oil through its joint venture with Chevron, after the U.S. giant's license expires in a month.

On Tuesday, the focus was also on the talks between Trump and Russian president Vladimir Putin regarding ending Ukraine's war.

Prices are impacted by the belief that a possible peace agreement would include the lifting of sanctions against Russia and the return to the global market of its crude oil supply.

(source: Reuters)