Oil prices rise amid reports of increased production in China.

As reported by Ukrinform, this information comes from Reuters.

Brent crude prices rose by 36 cents, or 0.5%, reaching $73.17 per barrel, while American West Texas Intermediate crude was priced at $70.10 per barrel, an increase of 34 cents, or 0.5%.

The prices climbed following official data released on Saturday, indicating that China's manufacturing activity grew at the fastest pace in three months in February, driven by new orders and increased purchasing volumes leading to significant production growth. Investors are anticipating the annual meeting of China's parliament, which begins on March 5, regarding further measures to support the economy.

Market analyst IG Tony Sycamore stated that one potential factor for the price increase was that "the Chinese manufacturing PMI from NBS returned to expansion territory over the weekend."

However, he cautioned that the country's economic outlook may not be encouraging, as another round of tariffs on exports to the US is set to begin on March 4.

Goldman Sachs analysts viewed this data somewhat more positively, noting in a memo that it suggests stable or slightly improved economic activity in China at the beginning of 2025, although the implementation of an additional 10% tariff by the US could trigger retaliatory measures.

Last month, both Brent and WTI experienced a price decline over three months, as the threat of tariffs from the US and its trading partners shook investor confidence in global economic growth for this year and reduced their appetite for riskier assets.

Overall sentiment improved following a summit on Sunday, where European leaders expressed strong support for Ukrainian President Volodymyr Zelensky and promised to do more to assist his nation.

On Sunday, Zelensky stated that he could salvage his relationship with Trump, but negotiations must continue behind closed doors. He added that he remains willing to sign a minerals agreement with the United States and believes that the US will also be ready.

“It is unclear where the US stands right now, making a peace agreement seem more distant than it did a week ago,” analysts at ING, led by Warren Patterson, said in their note. “This alters the energy market's hopes for a relaxation of sanctions.”

For 2025, analysts maintain their price forecasts for oil largely stable, with an average Brent price of $74.63 per barrel, as they expect any impact from further US sanctions to be balanced by sufficient supply and a possible peace agreement between Ukraine and Russia, according to a Reuters survey.

While the US calls for Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil companies operating there announced on Friday that they would not restore supplies through the Turkish port of Ceyhan due to a lack of clarity regarding commercial agreements and payment guarantees for past and future exports.

Photo: Bloomberg