Oil prices opened about 1% higher on Monday after the United States vowed to keep attacking Yemen's Houthis until the Iran-aligned group ends its assaults on shipping.
Mohammed Hamoud | Getty Images News | Getty Images
Oil traded higher on Monday after the United States vowed to keep attacking Yemen's Houthis until the Iran-aligned group ends its assaults on shipping, and Chinese economic data fuelled hopes for higher demand.
U.S. President Donald Trump launched military strikes against the Houthis on Saturday over the group's attacks against Red Sea shipping. One U.S. official told Reuters the campaign might continue for weeks.
Brent futures rose 72 cents, or 1%, to $71.30 a barrel, while U.S. West Texas Intermediate crude futures gained 59 cents, or 0.9%, to $67.77.
Chinese economic data also supported prices. Retail sales growth quickened in January-February in a welcome sign for policymakers' efforts to boost domestic consumption even as joblessness rose and factory output eased.
"Oil prices are benefiting from better-than-expected Chinese economic data, potential more stimulus measures in China and renewed tensions in the Middle East, although so far there are still no supply disruptions," said Giovanni Staunovo of UBS.
The oil market has a "comparatively healthy physical backdrop," said Tamas Varga of broker PVM, citing the premium at which nearby oil contracts are trading to those for later delivery, a structure known as backwardation.
"Dips remain attractive, albeit short-term buying opportunities in an otherwise eerie macroeconomic environment," he said.
Oil rose slightly last week, although Brent is still down almost 5% so far this year on concern over a global economic slowdown driven by escalating trade tensions between the U.S. and other nations.
The prospect of peace in Ukraine has also weighed on prices. Trump said he plans to speak to Russian President Vladimir Putin on Tuesday and discuss ending the Ukraine war, after positive talks between U.S. and Russian officials in Moscow.
Oil prices rose slightly last week, snapping a three-week losing streak caused by concerns over a global economic slowdown driven by escalating trade tensions between the U.S. and other nations. The Houthi attacks on shipping in the Red Sea have disrupted global commerce and set the U.S. military off on a costly campaign to intercept missiles and drones (Read more at CNBC).