Oil slightly rose in price amid news from China and Ukraine
3 March 10:10
Oil rose slightly on Monday after upbeat data from China’s manufacturing sector, the world’s largest crude oil importer, led to renewed optimism about fuel demand. However, uncertainty over a peace deal in Ukraine and the impact of potential US tariffs on global economic growth are creating tensions in the market, "Komersant Ukrainian" reports citing Reuters.
Thus, Brent crude oil rose by 19 cents (0.3%) to $73.00 per barrel as of 09:20 Kyiv time, while US West Texas Intermediate (WTI) was trading at $69.95 per barrel, also up 19 cents (0.3%).
The Chinese factor
Prices climbed after official data on Saturday showed that China’s manufacturing activity expanded at the fastest pace in three months in February, thanks to new orders and increased purchases, leading to a significant increase in production. Investors are closely watching China’s annual parliamentary meeting, which begins on March 5, expecting additional support measures for the country’s weakened economy.
IG market analyst Tony Sycamore noted that one of the possible factors behind the price increase was that
“China’s manufacturing PMI, according to the National Bureau of Statistics, returned to the expansion zone last weekend.”
However, he cautioned that the country’s economic outlook may not be too encouraging, as a new round of tariffs on exports to the United States is due to begin on March 4.
Last month, Brent and WTI recorded their first monthly drop in three months as the threat of tariffs from the U.S. and its trading partners shook investor confidence in global economic growth this year and reduced their appetite for risky assets.
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The Ukrainian factor
Overall sentiment improved after the summit on Sunday, where European leaders showed support for Ukrainian President Volodymyr Zelenskyy and pledged to do more to help Ukraine. This comes just two days after Zelenskiy clashed with US President Donald Trump, causing the Ukrainian leader to cut short his visit to Washington.
On Sunday, Zelenskiy said that he believes it is possible to restore relations with Trump, but that negotiations should continue behind closed doors. He added that he remained ready to sign a minerals agreement with the United States and believed that the United States would be ready to do so as well.
The dramatic confrontation has raised the possibility of an irreparable breakdown in relations between the two leaders and a potential separate peace between Washington and Moscow, RBC Capital analyst Helima Croft said in a research note.
“Such a scenario could indeed lead to a faster lifting of U.S. sanctions against Russia, especially those imposed entirely through executive orders,” she said,
– Croft said.
At the same time, the ongoing attacks on Russian refineries have raised concerns about the export of petroleum products from Russia. A fire was reported at another refinery in the Russian city of Ufa.
Forecasts and expectations
Although the US is calling on Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil companies operating there said on Friday that they would not resume shipments through the Turkish port of Ceyhan due to a lack of clarity on commercial agreements and payment guarantees for past and future exports.
For 2025, analysts largely maintain their oil price forecasts, expecting Brent to average $74.63 per barrel. They believe that any impact of further US sanctions will be balanced by ample supply and a possible peace deal between Russia and Ukraine, according to a Reuters poll.
