Crude Oil Jumps 2% as China’s PMI Fuels Demand Optimism

The National Bureau of Statistics (NBS) Manufacturing PMI report showed that China’s factory activity expanded at its fastest pace in three months, signaling a potential rebound in energy demand.

Tony Sycamore, an IG market analyst, noted that the return to expansionary territory in China’s PMI was one of the key drivers behind the recent price surge. However, he also warned that China’s economic recovery remains fragile, especially as U.S. tariffs on Chinese exports are set to increase by 10% on March 4.

While demand optimism boosted crude, geopolitical uncertainties kept investors on edge. A delay in a Russia-Ukraine peace deal and growing concerns over sanctions on Russian energy exports have further complicated market dynamics.

Key Takeaways:

• Oil climbs 2% as China’s PMI returns to growth, boosting demand sentiment.

• U.S. tariffs on Chinese goods set to increase by 10%, clouding economic outlook.

• Geopolitical risks remain high amid stalled Russia-Ukraine peace talks.

Geopolitical Uncertainty Weighs on Market Sentiment

Despite the positive momentum from China, crude markets remain vulnerable to global uncertainties. Ongoing tensions between Russia and Ukraine have raised concerns about energy supply disruptions, especially as recent attacks on Russian refineries and infrastructure put refined product exports at risk.

Additionally, a recent summit of European leaders showed strong support for Ukraine, but an earlier clash between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky has complicated diplomatic progress. ING analysts noted that the lack of clarity in U.S. foreign policy is reducing hopes for a near-term resolution, keeping energy markets volatile.

Meanwhile, the U.S. continues to push Iraq to resume crude exports from Kurdistan, but global oil firms operating there refuse to restart shipments due to uncertainty over payment guarantees and unresolved commercial agreements.

Key Takeaways:

• Russia-Ukraine tensions continue to fuel concerns over energy supply disruptions.

• U.S.-Ukraine diplomatic tensions increase uncertainty over future sanctions.

• Iraq’s stalled crude exports add another layer of market instability.

WTI Crude Oil Technical Outlook: Can Bulls Break $71?

Crude oil is currently trading at $70.01, struggling to break past the key $70.50 resistance zone. The 4-hour chart shows that WTI tested the descending trendline and the 50-day EMA ($70.28) before pulling back, suggesting that bullish momentum remains weak.

A clear breakout above $70.50 could open the door for a rally toward $71.21 and $72.05, with a further upside target at $73.11. However, failure to hold above $70.00 could send WTI lower, with immediate support at $69.11, followed by $68.34 and $67.48.

Conclusion:

Crude oil prices remain in bearish territory below $70.50, with key support at $69.11. A break above $71.21 could confirm a bullish reversal, but failure to hold $70.00 may push prices lower.

Summary Bullet Points:

• WTI crude oil jumps 2% as China’s PMI data lifts demand expectations.

• Geopolitical tensions and stalled peace talks keep market sentiment cautious.

• Oil remains bearish below $70.50, with upside limited unless $71.21 is cleared.

WTI crude remains range-bound, with traders awaiting U.S. tariff developments and further geopolitical updates before making directional bets.