Oil prices rose on Tuesday, driven by a combination of factors. The Chinese economy posted stronger-than-expected growth, providing a boost to oil demand. Heightened tensions in the Middle East also contributed to the price increase, as geopolitical risks can impact global energy supply.
Read more: Oil prices fluctuate amid Middle East tensions, but analysts see limited impact on supply
Brent crude futures for June delivery gained 48 cents, or 0.5 percent, settling at $90.58 per barrel by 04:37 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures for May delivery rose 49 cents, or 0.6 percent, to $85.90 per barrel.
The benchmarks rebounded on the back of solid economic performance in China, the world’s largest oil importer. Official data showed China’s gross domestic product grew 5.3 percent year-on-year in the first quarter, surpassing analysts’ expectations.
While the robust economic growth is seen as a positive sign for policymakers aiming to bolster confidence, other indicators such as property investment, retail sales, and industrial output suggested that overall demand remains weak, as the country continues to grapple with a prolonged property crisis.
However, the strength of the U.S. dollar limited the scale of the oil price gains. The greenback rose to over five-month highs, reflecting growing expectations that the Federal Reserve will maintain interest rates without cuts in the first half of 2024.
Oil prices had previously surged to the highest levels since October but then fell on Monday, despite the ongoing tensions in the Middle East.
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