Oil prices climb amid U.S. strikes and China's economic boost
Oil prices on the New York exchange are rising in response to data from China and U.S. strikes on Houthi positions, brokers report. Analysts at Goldman Sachs Group Inc. are already lowering their oil forecasts for the Brent benchmark due to numerous unfavorable factors affecting the commodity's prices.
A barrel of West Texas Intermediate oil for April delivery costs $67.63 on NYMEX in New York, up 0.67 percent. Brent on ICE for May is priced at $71.03 a barrel, after an increase of 0.64 percent.
China, the world's main oil importer, announced over the weekend that it will take actions to revive domestic consumption by increasing citizens' income, the Xinhua news agency reported.
Chinese authorities aim to stabilize the stock market and the domestic real estate sector, and also offer incentives to increase the birth rate among the population.
The government in Beijing is taking measures to support the economy and is trying to alleviate the deflationary pressures it faces.
Strike on Houthi
Meanwhile, there have been U.S. airstrikes on pro-Iranian Houthi rebel positions in Yemen.
The targets of the airstrikes included Houthi military facilities in the city of Taiz in southwestern Yemen, among others.
The U.S. Air Force also targeted Yemeni rebel facilities in the provinces of Saada, Damar, and Al-Bayda. In Sanaa, the headquarters of the Houthi Supreme Political Council, weapons depots, and command centers were shelled.
Decisive Operation
On Saturday evening, U.S. President Donald Trump announced that the military had launched a "decisive and powerful" operation against the Iranian-backed Houthi rebels in Yemen.
Since the fall of 2023, the Houthis have carried out over 100 attacks on merchant ships in the Red Sea and the Gulf of Aden, claiming solidarity with Hamas in its fight against Israel.
However, analysts point out that despite geopolitical tensions, the price of oil has decreased by more than $10 a barrel from its January peak, as the escalation of the U.S. trade war with trading partners negatively impacts commodity prices.
Additionally, OPEC+ plans to increase oil supplies starting in April, and the war in Ukraine may soon conclude, or at least military actions might be paused.
Unfavorable Factors
Analysts, including those from Goldman Sachs Group Inc., are lowering their oil forecasts for the Brent benchmark due to many unfavorable factors affecting commodity prices.
Goldman Sachs assesses that oil demand growth will be lower than previously estimated, as U.S. tariffs threaten global economic growth.
The company has cut its Brent forecast by $5 to $71 a barrel.
Goldman Sachs wrote in a market note that the medium-term risk to our forecast remains downside considering a potential further escalation of U.S. tariffs and possible prolonged maintenance of increased oil production by OPEC+.
However, in the short term, oil prices may slightly rebound as U.S. economic growth remains resilient despite adverse factors, and Western sanctions against Russia show no signs of easing.
