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Oil prices tame as China slowdown concerns offset Mideast risks

Oil prices tame as China slowdown concerns offset Mideast risks

Early trading Tuesday saw little change in oil prices as concerns about global growth, U.S. Tariffs and Russia-Ukraine peace talks offset the increased instabilities in the Middle East.

Brent futures increased 10 cents or 0.14% to $71.17 a bar by 135 GMT. U.S. West Texas Intermediate Crude futures climbed 7 cents or 0.1% to $67.65 a bar.

Tina Teng, an independent analyst of the market, said that "fundamental economic uncertainties are overshadowing geopolitical tensions".

The global demand outlook remains weak due to tariffs and the ceasefire talks in the Ukraine War.

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 the urban unemployment rate reaching its highest level in two years.

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

On Tuesday, the focus was on talks between Trump and Russian president Vladimir Putin to end the Ukraine war. Prices are impacted by the belief that a possible peace agreement would include the easing sanctions against Russia and the return to global markets of Russian crude oil.

The OECD stated on Monday, highlighting ongoing concerns over demand, as the other major downside risk to oil, that Trump's Tariffs would slow down the growth in the U.S.A., 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.

Lebanon and Syria have agreed to a ceasefire in the Middle East. Their defence ministries announced this in a statement on Monday after 10 people were killed in cross-border clashes in the last two days.

The change of regime in Syria has raised fears about the Middle East's future instability. (Reporting and editing by Jacqueline Wong; Colleen howe)

(source: Reuters)