Oil edged up on Monday as upbeat manufacturing data from China, the world's biggest crude importer, fueled renewed optimism about fuel demand, although uncertainty about a Ukraine peace deal and global economic growth from potential U.S. tariffs loomed.
Brent crude was up 19 cents, or 0.3%, at $73.00 a barrel by 0720 GMT while U.S. West Texas Intermediate crude was at $69.95 a barrel, up 19 cents, or 0.3%.
Prices rose after official data on Saturday showed Chinese manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchasing volumes led to a solid increase in output. Investors are eyeing China's annual parliamentary meeting, which starts on March 5, for further steps to support its battered economy.
IG market analyst Tony Sycamore said one possible driver of the price rise was that "China's NBS manufacturing PMI returned to expansionary territory over the weekend".
However, he warned that the country's economic outlook may not be encouraging, with another round of tariffs on exports to the US due to kick in on March 4.
Last month, Brent and WTI posted their first monthly declines in three months as the threat of tariffs from the US and its trading partners shook investor confidence in global economic growth this year and reduced their appetite for riskier assets.
Overall sentiment improved after a summit on Sunday at which European leaders showed strong support for Ukrainian President Volodymyr Zelenskiy and pledged to do more to help his country, just two days after US President Donald Trump clashed with him and Zelenskiy cut short a visit to Washington.
Zelenskiy said on Sunday he was confident he could salvage his relationship with Trump but that talks would need to continue behind closed doors. He added that he remained ready to sign a minerals deal with the United States, and he believed the US would be ready too.
The dramatic exchanges have raised the prospect of an irreversible rift between the two leaders, and a potential separate peace between Washington and Moscow, RBC Capital analyst Helima Croft said in a note.
"Such a scenario could indeed lead to a more rapid lifting of U.S. sanctions on Russia, especially those imposed entirely by executive order," Croft said.
In addition, ongoing attacks on Russian oil refineries have raised concerns about exports of its refined products, with another plant in the Russian city of Ufa reportedly on fire.
For 2025, analysts kept their oil price forecasts largely steady, with Brent averaging $74.63 a barrel, as they expect the impact of further U.S. sanctions to be offset by ample supply and the possibility of a peace deal between Russia and Ukraine, according to a Reuters poll.
Despite the U.S. urging Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil companies operating there said Friday they would not resume shipments through Turkey's Ceyhan port due to a lack of clarity on commercial agreements and payment guarantees for past and future exports. (Newsmaker23)
Source: Investing.com
