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Oil prices rose on Monday, recovering some of last week’s steep losses driven by concerns over China’s economic slowdown and easing tensions in the Middle East. Brent crude futures increased by $1.16, or 1.6%, to $74.22 per barrel at 1036 GMT, while U.S. West Texas Intermediate (WTI) crude gained $1.32, or 1.9%, to $70.54 per barrel.
Last week saw Brent and WTI suffer significant declines, with Brent down more than 7% and WTI losing around 8%. These were the largest weekly drops since early September, primarily due to concerns about weakening economic growth in China and a reduced risk of supply disruptions from the Middle East.
China’s Economic Stimulus Measures Provide Support
On Monday, China cut its benchmark lending rates as expected, as part of broader stimulus efforts to revive its economy. Despite these measures, data from last Friday revealed that China’s economy grew at its slowest pace since early 2023 during the third quarter, raising concerns about future oil demand in the world’s top importer.
However, optimism remains. Saudi Aramco’s CEO, speaking at an energy conference in Singapore, expressed confidence in China’s oil demand. He cited increased policy support aimed at boosting growth, along with rising demand for jet fuel and petrochemical feedstocks.
Record U.S. Oil Production Adds to Supply Side Dynamics
On the supply front, the U.S. Energy Information Administration (EIA) reported that U.S. oilfield production reached a record 13.5 million barrels per day (bpd) for the week ending October 11, an increase of 100,000 bpd. This rise in production could weigh on prices if supply continues to outstrip demand in global markets.
Middle East Tensions Stabilize
Meanwhile, geopolitical tensions in the Middle East remain a critical factor for oil markets. U.S. envoy Amos Hochstein is holding talks with Lebanese officials in Beirut regarding conditions for a ceasefire between Israel and Hezbollah. This comes as Israel expanded its air strikes on Hezbollah’s financial assets overnight, though concerns about major supply disruptions from the region have eased somewhat, helping to stabilize oil prices.
As the market digests these developments, oil prices remain volatile, influenced by economic signals from China and ongoing geopolitical risks in the Middle East.
