News

Oil Futures Rise Amid Concerns over China’s Property Sector and Middle East Tensions

4.6

Andrew R. Michaud

January 30, 2024

Oil futures saw a slight increase on Tuesday, as they attempted to rebound following worries about China's property sector and other concerns that caused a decline in crude prices. This drop occurred despite a significant escalation of tensions in the Middle East after a drone attack over the weekend resulted in the death of three U.S. troops in Jordan.

Price Moves

West Texas Intermediate crude for March delivery rose 23 cents, or 0.3%, to $77.01 a barrel on the New York Mercantile Exchange.
March Brent crude, the global benchmark, saw an increase of 3 cents, or less than 0.1%, reaching $82.43 a barrel on ICE Futures Europe. April Brent, the more actively traded contract, rose 6 cents, or 0.1%, to $81.89 a barrel.

Market Drivers

On Monday, oil futures experienced a decline of over 1%, retracting from their November highs due to concerns about China's economy and other uncertainties surrounding the demand outlook. However, the downside remained limited because of worries about a potential escalation of conflicts in the Middle East, which could impact crude oil flows.

According to Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, crude oil continues to stay positive following last week's price breakout above $75 per barrel and the rising tensions in the Red Sea region. She mentioned that everyone is now waiting for the U.S. response to the recent attacks.

Ozkardeskaya also noted that WTI encountered resistance near the $80 per barrel level on Monday and could potentially consolidate between $78 and $80 per barrel before a potential breakout above $80.

In other news, state producer Saudi Aramco announced on Tuesday that it would not attempt to increase its maximum daily oil production to 13 million barrels per day, despite receiving an order from the country's energy ministry. Instead, the company, also known as the Saudi Arabian Oil Co., stated that it would maintain its maximum output at 12 million barrels per day.