Oil Prices Rise 1% on Strong China Data Amid U.S. Tariff Concerns

Oil prices climbed 1% on Monday, driven by positive manufacturing data from China, the world’s largest crude importer, fueling optimism for demand. However, concerns over potential U.S. tariffs added uncertainty to the global economic outlook.

Brent crude rose 76 cents (1%) to $73.57 per barrel, while U.S. West Texas Intermediate (WTI) crude increased 75 cents (1.1%) to $70.51. Gains followed official data showing China's manufacturing sector expanded at its fastest pace in three months, boosting investor confidence. Analysts are closely watching China’s annual parliamentary meeting on March 5 for potential economic support measures.

IG market analyst Tony Sycamore noted that China's manufacturing PMI returning to expansionary territory contributed to price gains. However, he warned that looming U.S. tariffs on Chinese exports, set to begin March 4, could weigh on the economic outlook. Goldman Sachs analysts maintained a cautiously optimistic stance, stating that early 2025 economic activity in China appears stable, though additional tariffs may prompt retaliatory actions.

Last month, Brent and WTI recorded their first monthly decline in three months due to fears over U.S. trade policies and their impact on global growth. Market sentiment improved after European leaders reaffirmed their support for Ukrainian President Volodymyr Zelenskiy during a weekend summit. Meanwhile, ongoing attacks on Russian refineries, including a fire at a plant in Ufa, raised concerns over the country’s refined product exports.

For 2025, analysts project Brent crude to average $74.63 per barrel, balancing potential U.S. sanctions with ample supply and possible Russia-Ukraine peace talks. Separately, major oil firms in Kurdistan have yet to resume exports through Turkey, citing unresolved commercial agreements.