Oil News: Crude Prices Rise on Middle East Tensions and China Demand Hopes

Crude Oil Prices Edge Higher on Middle East Tensions and China’s Economic Data

Light crude oil futures are posting modest gains on Monday as the market undergoes a bottoming process. Prices briefly broke above last week’s high of $68.22, reaching an intraday peak at $68.37 before pulling back. The key technical resistance remains at the 200-day moving average, currently at $70.34, while minor support is seen at $66.79. Traders remain in a “sell the rally” mode unless the market decisively moves above this threshold.

At 10:25 GMT, Light Crude Oil Futures are trading $67.87, up $0.69 or +1.03%.

Geopolitical Risks and Chinese Demand Support Prices

Crude oil is finding support from renewed geopolitical risks in the Middle East. The U.S. has launched military strikes against Yemen’s Houthi rebels in response to their attacks on Red Sea shipping. A U.S. official suggested the campaign could extend for weeks, raising concerns over potential disruptions to oil flows in a critical maritime route.

At the same time, fresh economic data from China is providing a boost to sentiment. January-February retail sales showed stronger-than-expected growth, reinforcing optimism that demand could strengthen in the world’s largest crude importer. However, this comes against a backdrop of rising unemployment and a slowdown in factory output, creating a mixed outlook for overall economic activity.

China’s Refining Activity and Oil Stockpiles

China’s refiners drew from crude stockpiles for the first time in 18 months, indicating a tightening supply-demand balance. Refinery throughput in January-February exceeded available crude from imports and domestic production by 30,000 barrels per day (bpd), highlighting a rare decline in crude imports.

Several factors contributed to the lower import volumes, including refiners reducing purchases from Russia following new U.S. sanctions on Russian crude tankers. Additionally, the strength of global oil prices in early 2025 likely discouraged refiners from securing higher-priced cargoes. Brent crude peaked at $82.63 per barrel on January 15 before retreating.

Price Outlook: Near-Term Gains, but Resistance Holds

Despite the current bullish momentum, crude oil prices remain below key technical levels, particularly the 200-day moving average. While geopolitical risks and China’s economic data provide support, the absence of actual supply disruptions and a sluggish global demand recovery could limit further upside.

For now, traders will likely continue to view price dips as short-term buying opportunities, but a sustained rally above $70.35 will be required to shift sentiment decisively bullish. Until then, the market remains vulnerable to selling pressure on rallies.

More Information in our Economic Calendar.