May 21, 2024
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OIL & GAS

Oil Prices Rise on China’s Economic Growth, Middle East Tensions

Oil prices saw gains on Tuesday, buoyed by positive economic data from China and ongoing tensions in the Middle East following Iran’s recent missile and drone attack, according to market reports.

According to Reuters, Brent futures for June delivery increased by 20 cents, or 0.2%, reaching $90.30 a barrel by 0757 GMT. Similarly, U.S. crude futures for May delivery rose by 21 cents, or 0.3%, reaching $85.62 a barrel.

Earlier in the day, oil prices experienced nearly a 1% surge after China released official data revealing a stronger-than-expected growth in gross domestic product (GDP). The world’s largest oil importer recorded a 5.3% growth in the first quarter year-on-year, surpassing analysts’ forecasts.

However, gains were tempered as other Chinese economic indicators, such as real estate investment, retail sales, and industrial output, highlighted continued weakness in demand amid an ongoing property crisis.

Last week, oil prices soared to their highest levels since October but saw a decline on Monday following Iran’s attack on Israel. The attack, which proved to be less damaging than anticipated, alleviated concerns about a rapidly escalating conflict that could disrupt crude oil supplies.

“Israel’s response will determine whether the escalation ends or continues. The conflict could still be contained to Israel, Iran and its proxies, with possible involvement of the U.S.,” analysts at ANZ Research said in a note on Tuesday.

Prime Minister Benjamin Netanyahu of Israel convened his war cabinet for the second time in less than 24 hours on Monday to deliberate on how to address Iran’s unprecedented direct attack on Israel.

As a significant producer within the Organization of the Petroleum Exporting Countries (OPEC), Iran produces more than 3 million barrels per day of crude oil, further emphasizing the potential impact of geopolitical tensions on global oil markets.

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